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Home My WebLink AboutResolution - 2003-R0111 - Purchase Of Terrorism Coverage - Coregis Insurance Company - 03_05_2003Resolution No. 2003-RO111 March 5, 2003 Item No. 24 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to purchase terrorism coverage for and on behalf of the City of Lubbock, to be added to the existing property coverage, by and between the City of Lubbock and Coregis Insurance Company, and related documents. Passed by the City Council this 5th ATTEST: Rebecca Garza, City Secretary �. APPROVED AS TO CONTENT: Mary Hod e, Director of Human Resources APPROVED AS TO FORM: ml:/ccdocs/Coregis-terroism coverage.res February 24, 2003 day �f March ?nni Resolution No. 2003—RO111 NOTICE OF COVERAGE FOR ACTS OF TERRORISM • Coregis Insurance Company fl 1}!1 U V CITY OF LUBBOCK P.O.Box 2000 Lubbock TX 79457-0001 DEC 2 3 2002 II IMPORTANT - THIS LETTER DISCUSSES COVERAGE FOR TERRORISM UNDER YOUR INSURANCE POLICY - PLEASE READ CAREFULLY AND CONSULT YOUR AGENT, BROKER, OR OTHER INSURANCE PROFESSIONAL IF YOU HAVE ANY 'QUESTIONS. Dear Insured: WHAT HAS HAPPENED? The tragic events of September 11, 2001 have affected our country in many ways. The insurance industry responded immediately to these events, and has provided billions of dollars of payments. However, the possibility of future attacks has created what Congress describes as an "unprecedented financial risk" with a significant impact on the economy. As a result, Congress passed the Terrorism Risk Insurance Act of 2002 (The Act). The Act provides that all property and casualty insurers must offer their policyholders the opportunity to purchase coverage for "acts of terrorism", and that there will be a temporary (through the year 2005) payment from the federal government of 90% of losses from such acts which exceed the statutorily established deductible (an annually increasing percentage of the insurer's earned premium for the commercial lines of business of the previous year). This deductible must first be paid by each insurance company - WHAT IS AN "ACT OF T ERRORISM"? • An "act of terrorism" is defined as: Any act that is certified by the Secretary of the Treasury: (1) To be an act of terrorism; (2) To be a violent act or an act that is dangerous to (a) human life; (b) property; or (c) infrastructure; (3) To have resulted in damage within the United States, or outside the United States in the case of certain aircraft or vessels, or on the premises of a US mission; and (4) To have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest as part of an effort to coerce the civilian populations of the US or to influence the policy or affect the conduct of the US Government by coercion. SP2455 (12/02) • • No act will be certified as an "act of terrorism" if (1) It does not meet the above criteria; (2) The act is committed as part of the course of war declared by Congress (other than with respect to Workers' Compensation); (3) Property and casualty losses resulting from the act, in the aggregate, do not exceed $5,000,000. As used in the letter and the attached Notice, the phrases "act of terrorism" and "acts of terrorism", when set out in quotation marks, are to be construed as defined above. HOW DOES THE ACT AFFECT YOUR INSURANCE COVERAGE? You have a policy of insurance issued by Coregis Insurance Company which has no terrorism exclusion attached to it. • Your current policy will remain in effect as written for the remainder of the current policy period. • As required by the Act, this letter constitutes notice to you of the existence of the Act, and the payments, which will be made from the Federal Government if there is a certified "act of terrorism". • The decision not to include a terrorism exclusion to your policy when it was issued or last renewed was based on a number of reasons, and the continuation or importance of these reasons may or may not have been altered by the passage of the Act. • In the time between now and the next renewal we will examine and refine our treatment of terrorism under your policy. This means that you may or may not have the same terms offered to you upon renewal and that the • premium charged may or may not reflect alteration based upon the terrorism exposure. 0 Please contact your insurance agent, broker, or other insurance professional if you have any questions, comments or concerns about your coverage. Yours sincerely, A. Louis Parker D EcEOWE DEC 2 3 2002 HUMAN RESOURCES/RISK SP2455 (12/02) NOTICE OF COVERAGE FOR CERTAIN ACTS OF TERRORISM Coregis Insurance Company IVED City of Lubbock MAR 0 5 2Q03 651010279 Chief Financial Officer / Senior Insurance Buyer HUMAN RESOURCES ES P. O. Box 2000 Lubbock, TX 79457 IMPORTANT — THIS LETTER DISCUSSES A DECISION YOU MUST MAKE ON COVERAGE FOR TERRORISM UNDER YOUR INSURANCE POLICY — PLEASE READ CAREFULLY AND CONSULT YOUR AGENT, BROKER OR OTHER INSURANCE PROFESSIONAL IF YOU HAVE ANY QUESTIONS. Dear Insured: WHAT HAS HAPPENED? The tragic events of September 11, 2001 have affected our country in many ways. The insurance industry responded immediately to these events, and has provided billions of dollars of payments. However, the possibility of future attacks has created what Congress describes as an "unprecedented financial risk" with a significant impact on the economy. As a result, Congress passed the Terrorism Risk Insurance Act of 2002 (The Act). The Act provides that all property and casualty insurers must offer their policyholders the opportunity to purchase coverage for "acts of terrorism", and that there will be a temporary (through the year 2005) payment from the federal government of 90% of losses from such acts which exceed the statutorily established deductible (an annually increasing percentage of the insurer's earned premium for the commercial lines of business of the previous year) This deductible must first be paid by each insurance company. WHAT IS AN "ACT OF TERRORISM"? • An "act of terrorism" is defined as: Any act that is certified by the Secretary of the Treasury: (1) To be an act of terrorism; (2) To be a violent act or an act that is dangerous to (a) human life; (b) property; or (c) infrastructure; (3) To have resulted in damage within the United States, or outside the United States in the case of certain aircraft or vessels, or on the premises of a US mission; and (4) To have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest as part of an effort to coerce the civilian populations of the US or to influence the policy or affect the conduct of the US Government by coercion. • No act will be certified as an "act of terrorism" if: (1) It does not meet the above criteria; (2) The act is committed as part of the course of war declared by Congress (other than with respect to Workers' Compensation); (3) Property and casualty losses resulting from the act, in the aggregate, do not exceed $5,000,000. As used in the letter and the attached Notice, the phrases "act of terrorism" or "acts of terrorism", when set out in quotation marks, are to be construed as defined above. SP2454 (12/02) HOW DOES THE ACT AFFECT YOUR INSURANCE COVERAGE? You have a policy of insurance issued by Coregis which has a terrorism exclusion attached to it. Effective immediately, that exclusion is temporarily limited to apply only to losses, which were originally, excluded OTHER THAN "ACTS OF TERRORISM". That is, you now have coverage for losses attributable to "acts of terrorism" and that coverage will continue subject to your payment of the premium as set out below. As required by the Act, this letter constitutes an offer to you to purchase coverage for losses you may have which are otherwise covered by your policy which result from an "act of terrorism" and presents our premium charge for that coverage. • you have declined the coverage; or • you pay no premium or if you nay less than the premium charge indicated; or • you pay after the premium due date; or • you have not responded in any way to this letter by the premium due date. • If you do pay the premium by the premium due date your terrorism exclusion will continue to apply as written to all events or occurrences except "acts of terrorism". • If you do not pay the premium by the premium due date your terrorism exclusion will continue to apply fully as written. WHAT MUST YOU DO? • You must decide whether you wish to purchase the coverage for losses you might have arising out of or resulting from an `pact of terrorism". You should consult with your agent or broker, insurance professional or other advisor, if you are unsure. If you decide to purchase terrorism coverage you must make your decision and pay this premium by 03/31/2003. • The attached notice with this letter serve to modify your policy and should be kept with your policy. IF YOU ELECT TO PURCHASE THIS COVERAGE, YOU MUST RETURN THE ATTACHED FORM AND YOUR CHECK TO US IN THE ENCLOSED ENVELOPE WITHIN 30 DAYS FROM THE RECEIPT OF THIS LETTER. HAVE THE COVERAGE. Yours sincerely, A. Louis Parker �f MAR 0 5 2003 HUMAN RESOURCES SP2454 (12/02) Resolution No. 2003—ROIII PLEASE RETURN THIS FORM IN THE - ENCLOSED ENVELOPE COVERAGE OR EXCLUSION OF COVERAGE UNDER THE TERRORISM RISK INSURANCE ACT OF 2002 DATE OF ACT: November 26, 2002 PREMIUM FOR COVERAGE FOR AN "ACT OF TERRORISM": $5222.87 POLICY NUMBER: 651010279 NAMED INSURED: City of Lubbock YOUR ADDRESS: YOUR TELEPHONE NUMBER: PREMIUM DUE DATE: 03/31/2003 AGENT NUMBER: IMPORTANT IF YOU: RECEIVED MAR 0 5 2003 HUMANURCE FAIL TO PAY THE EXACT PREMIUM INDICATED BY 03131/2003, OR DECLINE COVERAGE AS SET OUT IN THE ATTACHED LETTER, OR DO NOT RESPOND TO THIS NOTIFICATION, YOUR CURRENT TERRORISM EXCLUSION WILL BE IMMEDIATELY REINSTATED. You may eventually be obligated to pay a Surplus Lines tax on the Premium applicable to this coverage. If that is the case you will be notified by your agentlbroker/producer as to the amount and the date such tax is due. IF YOU: • ELECT TO PURCHASE THE COVERAGE FOR "ACTS OF TERRORISM", AND • PAY THE INDICATED PREMIUM BY THE PREMIUM DUE DATE, YOUR CURRENT TERRORISM EXCLUSION WILL APPLY AS WRITTEN EXCEPT THAT IT WILL NOT APPLY TO AN "ACT OF TERRORISM." Please indicate your selection below and return it in the enclosed addressed envelope. XXX I ELECT TO PURCHASE COVERAGE FOR "ACTS OF TERRORISM" AS DEFINED IN THE ATTACHED LETTER. (PAYMENT FOR THE EXACT AMOUNT INDICATED IS ENCLOSED). I DO NOT WISH TO PURCHASE COVERAGE FOR "AC S OF TERORISM" AS DEFINED IN THE ATTACHED LETTER. /% Please make checks payable to: Mayor, �e Rgnature oc Marc McDougal Representative Printed Name Coregis Insurance Company FTL 02 ATTN: Robert Miller 525 West Van Buren Street, Suite 500 Chicago, IL 60607 SP2454 (12/02) ATTEST: R becca Garza, City Secretary APPROVED AS TO FORM: n Knight, sistan ity Attorney APPROVED AS TO CONTENT: 264� --�- Mary Hous , Director of Human Resources