In our e-mail dated December 19, 2002, we outlined the elements of the recently enacted federal terrorism insurance bill along with the possible effects on your AEGIS policies. The legislation, as you will recall, applies to AEGIS Excess Liability, D&O, Fiduciary, Excess Workers' Compensation and Property policies.
We recently analyzed the government protection, the AEGIS coverages, and our reinsurance program, and based on that analysis, we identified the amount of additional premium we must charge in order to provide terrorism coverage. The premium adjustments, and the details of the available terrorism coverage, are described in letters that we're issuing to each policyholder this week.
For policies in force as of November 26, 2002—and for policies incepting between November 26, 2002 and January 9, 2003—the current AEGIS terrorism exclusions are now void. As a result, these policies provide terrorism coverage as defined by the new law. Your letter will describe the coverage and the corresponding premium charge. You'll have 30 days from the date on your letter to accept or reject the premium charge and the coverage, and we'll amend the policy to reflect your choice.
Renewing or new policies, which include all policies bound with an effective date of January 10, 2003 or later, will be quoted with the option of terrorism coverage. As with existing policies, your letter will provide coverage and premium details, and you'll have the option of accepting or rejecting the coverage.
We believe you'll be pleased with the scope of the coverage and agree that the premium increases are relatively modest. If you have any questions about the terrorism coverage letters, please contact your AEGIS underwriter or Gil Gould at 201.521.4824.