By Diana Kowatch, CPCU, AU, AAM, CPIW
The PF&M Companion is a service of the Policy, Form and Manual Analysis Service, published by the Rough Notes Company, Inc. Policy, Form and Manual Analysis (PF&M), continually updated since 1929, is the personal, commercial, and specialty policy and form analysis service provided by the Rough Notes Company. PF&M is available in paper, on disk in Three Part Harmony, and on CD-ROM through Silver Plume as Rough Notes. For more information on this service call 1-800-428-4384.
Includes copyrighted material of Insurance Services Office, Inc., or ISO Commercial Risk Services, Inc., with its permission; ©Copyright, Insurance Services Office, Inc., 1997 ©Copyright, ISO Commercial Risk Services, Inc., 1997.ion of Insurance: A blank line for insurers to insert a coverage not listed has been added if that coverage may be suspended by that particular state's law. UIM may now apply either in combination with UM or stand-alone. Three other endorsements also are amended accordingly: CA 20 15-Mobile Equipment; CA 20 21-Snowmobiles; and CA 20 27-Registration Plates Not Issued For A Specific Auto.
COUNTRYWIDE
1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements Under Physical Damage Coverage-Coverage Extensions, the word "temporary" is added to transportation expense, so only "temporary" transportation expenses are covered after a total theft of a covered vehicle.
Supplementary Payments have been corrected to read "suits against the insured," thus clarifying that the insured, not the suit, is covered. Similar wording is changed in Duties In the Event Of Accident, Claims, Suit or Loss. The maximum daily payment for loss of earnings by the insured has been increased to $250 per day. The limit for bail bonds has been raised to $2,000.
Who Is An Insured has been amended to include limited liability companies (LLC).
Symbol 30 of the Garage coverage form has been amended to use the same definition of "a customer's auto" that is in Garagekeepers Coverage Form-CA 99 37. The excess coverage option is amended to clarify that the Direct Coverage Options are not mutually exclusive of the underlying legal liability coverage. Coverage may apply even when the insured is not legally liable.
In Exclusion #4, Employee Indemnification and Employer's Liability and Exclusion #5-Fellow Employee, a definition has been added for "domestic employee."
Under Physical Damage Exclusions, radar or other such equipment has been revised to also exclude any jamming devices.
In the Garage Coverage Form-CA 00 05, the physical damage exclusion to an auto dealership now states that there is no coverage for the loss of market value or resale value.
In the condition for Duties In The Event of Accident, Claim, Suit Or Loss, language is strengthened to clarify that the insurer has no obligation until the insured has complied with all duties.
Three new definitions have been added for "Employee;" "Leased Worker" and "Temporary Worker."
The following new endorsements are added:
CA 20 47-Additional Insured - Lessor of Leased Equipment; CA 20 48-Designated Insured; CA 20 49-Additional Insured - Garages - Grantor of Franchise; CA 23 24-Agricultural Produce Trailers - Seasonal; and CA 23 25-Coverage For Injury To Leased Workers.
Revisions have been made to endorsements as follows:
CA 02 40-Suspension of Insurance: A blank line for insurers to insert a coverage not listed has been added if that coverage may be suspended by that particular state's law. UIM may now apply either in combination with UM or stand-alone. Three other endorsements also are amended accordingly: CA 20 15-Mobile Equipment; CA 20 21-Snowmobiles; and CA 20 27-Registration Plates Not Issued For A Specific Auto.
CA 20 19-Repossessed Autos: Space has been added to show a limit for unlisted locations.
CA 23 17-Truckers-Intermodal Interchange Uniform Endorsement Form UIIE-1: Various changes have been made in response to the Uniform Intermodal Interchange and Facility Access Agreement (UIIA) by the Intermodal Association of North America (IANA).
CA 25 03-False Pretense Coverage: The insured now is required only to take reasonable steps to have a warrant issued. Excluded is coverage if a bank or other drawee fails to pay. Coverage is granted for vehicles on consignment. The reference to a limit of $25,000 is replaced by the amount shown either in the schedule or in the declarations.
CA 25 14-Broadened Coverage-Garages: Has been revised to reflect the recent CGL change clarifying that the professional services excluded are health care services. The coverages provided by this endorsement apply only to the non-auto exposures.
CA 99 10-Drive Other Car Coverage-Broadened Coverage For Named Individuals: The mandatory $50 collision deductible has been deleted.
CA 99 28-Stated Amount Insurance: A simple revision has been made to clarify that the stated deductible applies to this endorsement.
CA 99 37-Garagekeepers Coverage and CA 99 59-Garagekeepers Coverage-Customers' Sound Receiving Equipment: The excess coverage option is amended to clarify that the Direct Coverage Options are not mutually exclusive of the underlying legal liability coverage. Further, coverage may apply even when the insured is not legally liable.
The above is a simplified recap of the revisions. Please review each endorsement carefully before using. Listed below under the individual states, are those that have approved these program changes. This text will not be repeated but will refer back to this Countrywide section.
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
A new endorsement, CP 15 56-Business Income Changes - Beginning Of The Period Of Restoration (No Waiting Period), has been developed to eliminate the 72-hour waiting period deductible in the Business Income coverage forms (both with or without Extra Expense). This change applies to all policies written on or after September 1, 1997.
ARIZONA
As a result of the decision reached by the Arizona Court of Appeals in Transportation Ins. Co. v. Martinez, 899 P. 2d 194, 183 (Ariz. Div. 1, 1995), the Personal Auto endorsement, PP 01 67-Amendment of Policy Provisions-Arizona, has been revised. The changes involved are the removal of the governmental vehicle exclusion in the Uninsured Motorists coverage (Section III, Part C), as well as the updating of the definition of an underinsured motor vehicle to no longer exclude governmental vehicles. This change applies to all policies written on or after September 1, 1997.
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
ARKANSAS
In order to respond to the homeowners loss settlement terms used in Arkansas Bulletin No. 1-96, two new endorsements have been developed, HO 23 47-Excess Dwelling Coverage (Specified Additional Amount of Insurance for Coverage A - Dwelling) and HO 23 49--Excess Dwelling Coverage (Specified Additional Amount of Insurance for Coverage A, B, C and D). One endorsement, HO 04 11-Additional Limits of Liability For Coverages A, B, C and D, has been withdrawn. These changes apply to all policies written on or after August 1, 1997.
CALIFORNIA
The commercial lines endorsement, IL 02 70-California Changes--Cancellation and Nonrenewal Endorsement, has been revised in order to make clear that the cancellation provision stated in the endorsement supersedes the same provision in both IL 00 17-Common Policy Conditions and BP 00 09-Businessowners Common Policy Conditions. The revisions further state that when a cancellation is made for fraud, material misrepresentation, and nonpayment of premium, the minimum time that must be allowed is 10 days. This minimum applies no matter how long the policy itself has been in effect.
The following policies or coverage parts apply to the revised endorsement: Boiler and Machinery coverage part, Businessowners policy, Commercial Auto coverage part, Commercial Crime coverage part, Commercial Genera Liability coverage part, Commercial Inland Marine coverage part, Commercial Property coverage part, Farm coverage part, Liquor Liability coverage part, Pollution Liability coverage part, and Products/Completed Operations Liability coverage part. These revisions may be used by ISO participating insurers as of April 16, 1997.
Because of Section 11580.04 of California Senate Bill 2032, the multistate general liability endorsement, CG 20 09-Additional Insured - Owners, Lessees or Contractors - Scheduled Person or Organization (For Use When Contractual Liability Coverage Is Not Provided To You In This Policy), does not apply in California. The bill does not permit coverage in the CGL when issued to a public agency, which has been endorsed with an additional insured to cover the active negligence of any additional insured in any way relating to a construction contract. As a result, a new endorsement has been developed and approved changing coverage wording so that it does not apply to the active negligence of the additional insured.
The new endorsement is: CG 01 30-California Changes - Additional Insured - Public Agency - Owners, Lessees or Contractors - Scheduled Person or Organization (For Use When Contractual Liability Coverage Is Not Provided To You In This Policy). This endorsement may be used by ISO participating insurers as of April 16, 1997.
COLORADO
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes carry a distribution date of October, 1997.
CONNECTICUT
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after December 1, 1997.
DELAWARE
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
FLORIDA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after December 1, 1997.
Two commercial auto endorsements, CA 21 47-Florida Uninsured Motorists Coverage-Stacked and CA 21 72-Florida Uninsured Motorists Coverage-Nonstacked, have been revised to clarify both the matching offer subrogation procedures and the pro rata clause. These changes apply to all policies effective on or after December 1, 1997.
GEORGIA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
IDAHO
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
ILLINOIS
The January 1997 multistate revisions to the following four general liability pollution endorsements have been approved:
* CG 00 39-Pollution Liability Coverage Form Designated Sites
* CG 00 40-Pollution Liability Limited Coverage Form Designated Sites
* CG 28 01-Extended Reporting Period Endorsement
* CG 28 33-Voluntary Clean-Up Costs Reimbursement
In addition, a new endorsement, CG 28 28-Illinois Changes-Extended Reporting Period, also has been approved to permit the insured to purchase this coverage when the CGL policy was canceled for non-pay. These changes apply to all policies written on or after November 1, 1997.
Two commercial auto endorsements have deleted the "exhaustion clause" which required an insured to exhaust the available limits of the underinsured motorists coverage of the party causing the injury before collection from his/her own policy. In states where the uninsured and underinsured motorist coverages are separate items, the exhaustion clause is not applicable and, therefore, has been removed. The revised endorsements are: CA 21 30-Illinois Uninsured Motorists Coverage and CA 21 53-Illinois Uninsured Motorists Coverage-Property Damage.
In addition, CA 21 38-Illinois Underinsured Motorist Coverage endorsement has been amended to clarify procedures that apply to subrogation, specifically matching offer subrogation. The amended conditions are first. The CONSENT TO SETTLE exclusion has been deleted in its entirety as it no longer applies. The DUTIES IN THE EVENT OF ACCIDENT, CLAIM, SUIT, OR LOSS has been amended so that it will be consistent with other underinsured motorist coverage endorsements. These changes apply to all policies written on or after October 1, 1997.
INDIANA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
IOWA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
KENTUCKY
The personal auto endorsement amended is PP 01 53-Amendment of Policy Provisions - Kentucky, and this change applies to all policies written on or after August 1, 1997.
The Supreme Court of Kentucky has ruled that the right of subrogation is not effective until such time as the insured has been made whole or is fully compensated for an injury or loss under both the uninsured and underinsured motorist coverages. The case involved is Wine v. Globe American Casualty Co., 917 S. W. 2d 558; 1996 KY. As a result, revisions have been made to both commercial and personal auto endorsements in the areas of the exhaustion clause (removed) and changes to the following provisions: "Transfer of Right of Recovery Against Others to Us," "Consent to Settle," and "Duties in the Event of Accident, Suit, Claim or Loss."
Finally, the definition of underinsured motor vehicles has been amended. The two commercial auto endorsements are: CA 21 76-Kentucky Uninsured Motorists Coverage and CA 21 79-Kentucky Underinsured Motorists Coverage. The commercial changes apply to all policies written on or after October 1, 1997.
MICHIGAN
Two personal auto endorsements, PP 03 86-Rating Information-Michigan and PP 03 87-Rating Information (Mileage Class Plan)-Michigan, have been revised to comply with 1996 Michigan Public Acts 98 (former H.B. 5177). This law requires insurers, in writing, to provide policyholders with the descriptions of specific rate classifications, and to show the insured how rates and premiums have been determined. The notice must accompany renewals, bills, or other payment due notices. These changes apply to all policies written on or after July 1, 1997.
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
MINNESOTA
The Supreme Court of Minnesota has ruled in Malmin v. Minnesota Mutual Fire & Casualty Company, 552 N. W. 2d 723 (Minn. 1996), that the clause found in the personal auto policy, referred to as the "consent to sue" clause (the clause requiring the insured to obtain written consent of the insurer before filing suit against a negligent party), was unenforceable because it violated Minnesota's No-Fault Automobile Insurance Act. As a result, revisions have been made to Personal Auto Endorsement PP 04 97-Uninsured/Underinsured Motorist Coverage-Minnesota so that it now provides that an insurer is not bound by a judgment from a suit unless that insurer has been given reasonable notice of the suit and adequate time to protect the insurer's interests. The personal auto changes apply to all policies written on or after August 1, 1997.
In order to comply with 1996 Minn. Laws (former S.B. 1980), revisions have been made to several homeowners and mobilehome endorsements. The cancellation for nonpayment of premium and for policies that are being canceled but that have been in effect for less than 60 days now must have a minimum of 30-days' notice. The exclusion for ordinance or law is amended to comply with MINN. Stat. 65A.01 Subd. 1 and 5. The provision on Concealment or Fraud is revised to clarify that no coverage for loss is provided for such. HO 01 22-Special Provisions-Minnesota, has been amended accordingly.
Two endorsements, HO 04 20-Specified Additional Amount of Insurance Coverage A Only, and HO 23 58-Additional Limits of Liability for Coverages A, B, C and D, have been withdrawn and are replaced by HO 23 51-Additional Limits of Liability for Coverages A, B, C and D, and HO 23 52--Specified Additional Amount of Insurance Coverage A Only. These endorsements were amended to provide replacement cost coverage which includes increased construction costs necessitated by building code upgrades, it deleted the "like construction" provision, and makes any adjustment to property include the cost to repair or replace in accordance with ordinance or law. These changes apply to all policies written on or after August 1, 1997.
Approval has been received for the 1993 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements with Minnesota-specific forms, endorsements, loss costs, and rules supplements. These revisions carry an August 1997 distribution date.
MISSISSIPPI
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after November 1, 1997.
MONTANA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
NEBRASKA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
NEVADA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
NEW HAMPSHIRE
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
NEW JERSEY
In order to comply with the New Jersey Insurance Department, revisions have been made to Commercial Lines Endorsement IL 02 08-New Jersey Changes-Cancellation and Nonrenewal. Changes include the reinstatement of language requiring that any notice of cancellation be sent to the first named insured and any other person entitled to receive such notice, and that the reason for cancellation must be provided to the first named insured. This change applies to all policies written on or after October 1, 1997.
NORTH CAROLINA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after December 1, 1997.
Commercial Auto Endorsement CA 21 16-North Carolina Uninsured Motorist (UIM) Coverage has been revised to reflect the procedure for matching offer subrogation. Some of the changes and reformatting were for consistency with other UM/UIM forms; the Consent to Settle exclusion is amended to indicate that it does not apply if matching offer subrogation is in effect; and "Duties in the event of accident, Claim, Suit or Loss" has been amended to require the insured to notify the UIM insurer in writing of any tentative settlement offer, after which the UIM insurer has 30 days in which to make advance payment to match the settlement offer. "Transfer of Rights of Recovery Against Others to Us" also has been revised to clarify the procedure in place. These change apply to all policies written on or after October 1, 1997.
NORTH DAKOTA
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
OHIO
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
Revision has been made to Commercial Auto Endorsement CA 31 17-Ohio Uninsured Motorists Coverage-Property Damage to clarify that the underinsured motorist coverage will apply as primary. Also, only the exhaustion of a simple tortfeasor's liability protection may trigger underinsured motorist coverage. These changes apply to all policies written on or after October 1, 1997.
OREGON
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
PENNSYLVANIA
Personal Auto Endorsement PP 01 51-Amendment of Policy Provisions-Pennsylvania, has been revised in response to Allstate Ins. Co. v. Clarke, 527 A.2d 1021 (Pa. Super. CT. 1987). The ruling states that in cases where an insurer makes a payment under an insurance policy and the person receiving the payment also recovers from another party, the person receiving the payment must hold the proceeds of the recovery in trust for the insurer and reimburse the insurer to the extent of that insurer's payment minus "reasonable" defense costs incurred. This change applies to all policies written on or after August 1, 1997.
Likewise, commercial auto endorsements have been revised and fortified by a similar court case, Assoc. Hosp. Serv. of Philadelphia v. Pustilnik, 439 A.2d 1149 (Pa. 1981). The revised commercial endorsements include: CA 01 80-Pennsylvania Changes; CA 21 06-Pennsylvania Uninsured Motorists Coverage-Stacked; CA 21 91-Pennsylvania Underinsured Motorists Coverage-Stacked; CA 21 92-Pennsylvania Uninsured Motorist Coverage-Nonstacked; and CA 21 93-Pennsylvania Underinsured Motorists Coverage-Nonstacked. These changes apply to all policies written on or after September 1, 1997.
RHODE ISLAND
A new commercial lines endorsement and subsequent manual rules have been developed to outline the direct liability of the insurer to the insured party should subrogation proceed and the insurer collect from a third party. The new endorsement is IL 01 97-Rhode Island Changes. It applies to Boiler and Machinery, Commercial Crime, Commercial Fire and Allied Lines, Commercial General Liability, and Farm. This change applies to all policies written on or after September 1, 1997.
The 06-95 Edition of the multistate commercial property changes made changes to rules, loss costs, forms, and SCOPES filings including: an increase in the base property damage deductible for buildings, personal property, spoilage, and builders' risk from $250 to $500, with a $250 buy-back available. Optional deductibles now start at $1,000 instead of $500. Condo Commercial Unit-Owners Optional Coverage Form CP 04 18 is revised: changes in rates were filed to coincide with the increase in the base deductible from $250 to $500. Provisions were made for additional loss assessment coverage subject to a separate schedule and limit, but no more than $1,000 for an assessment due to the condominium association's policy deductible.
The form also has been revised to allow for the insertion of a deductible for Loss Assessment. A major SCOPES change is to the property protection class multipliers which have been revised and now base the multipliers on the building construction in addition to the protection class. The table for Windstorm or Hail Percentage deductibles has been modified to adjust the ranges of the amounts of insurance at each location to complement the deductible changes. The rating examples appendix and Rhode Island loss costs have been amended to reflect the above changes. These changes apply to all policies written on or after August 1, 1997.
SOUTH CAROLINA
Commercial property revisions have been approved to incorporate the ISO 1991 multistate commercial property changes to the coverage forms and endorsements, Multi-Location Premium And Dispersion Credit Plan, and the 91, 93, and 96 classification table revisions. These changes apply to all policies written on or after September 1, 1997.
TENNESSEE
New 1997 Multistate Home Business Insurance Coverage Optional Endorsement providing first- and third-party coverages for certain types of businesses that are conducted from the residence premises has been approved for all policies written on or after June 1, 1997.
Commercial auto coverage for uninsured motorists under CA 21 20-Tennessee Uninsured Motorists Coverage has been revised to add provisions for matching offer subrogation procedures. The "exhaustion clause" has been removed and new wording has been added to allow for tentative settlement offer from the tortfeasor's insurer which is then matched by the insured's insurance company. The "Consent to Settle," "Duties in the Event of Accident, Claim, Suit or Loss," and "Transfer of Rights of Recovery Against Others to Us" provisions have been amended accordingly. These changes apply to all policies written on or after October 1, 1997.
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
UTAH
The 1997 Multistate Revisions to the Commercial Auto Coverage Forms and Endorsements have been approved--refer to Countrywide above. These changes apply to all policies written on or after October 1, 1997.
WASHINGTON
In order to comply with Washington Bulletin 79-4 and the decision reached in Thiringer v. American Motors Ins. Co., 91 Wn.2d 215, regarding the conditions on "Transfer of Your Rights Against Others to Us" and "Recoveries," a new endorsement has been developed for commercial crime: CR 01 35-Washington Changes endorsement. This new endorsement and the related manual rules state the applicable state-specific provision. These changes apply to all policies written on or after September 1, 1997.
WEST VIRGINIA
Commercial auto coverage for uninsured and underinsured motorists under CA 21 22-West Virginia Uninsured And Underinsured Motorists Coverage has been revised to add provisions for matching offer subrogation procedures. This change results from Allstate Insurance Company v. Karl, 190 W.Va. 176, 437 S. E. 2d 749. The "exhaustion clause" has been removed and new wording has been added to allow for tentative settlement offer from the tortfeasor's insurer which is then matched by the insured's insurance company. The "Consent to Settle" provision has been amended accordingly. These changes apply to all policies written on or after October 1, 1997. *