By Diana Kowatch, CPCU, AU, AAM, CPIW dianak@in.net
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.
COUNTRYWIDE
NEW ADVISORY DECLARATIONS AND SCHEDULES
ISO has revised its method of handling advisory declarations and schedules. As revisions and updates are made to a line of business, advisory declarations and schedules will be updated as needed and assigned a new designation and numbering schematic. The purpose is to make usage, filing and tracking easier. The new designation is DS and will be shown as a second pair of alpha digits after the line of business designation. For example, the new declarations for the Commercial General Liability Declarations will be shown as CG DS 01 07 97. Seven new commercial liability declarations have been developed and follow the new designation and numbering scheme as follows:
* CG DS 01 07 97 Commercial General Liability Declarations
* CG DS 02 07 97 Owners And Contractors Protective Liability Declarations
* CG DS 03 07 97 Liquor Liability Declarations
* CG DS 04 07 97 Railroad Protective Liability Declarations
* CG DS 05 07 97 Products/Completed Operations Liability Declarations
* CG DS 06 07 97 Pollution Liability Declarations
* CG DS 07 07 97 Underground Storage Tanks Liability Declarations
CANADA AND THE USA--AUTOMOBILE LIABILITY
In a recent move, the superintendent of financial institutions for the province of British Columbia, contacted all of the U.S. insurance regulatory bodies to inform them that U.S. citizens may be in violation of minimum financial responsibility requirements when driving private passenger vehicles in Canada. In order to alleviate the problem, a filing procedure has been developed which may involve every U.S. insurer that provides automobile liability insurance. Individual insurers who desire to provide compliance for insured drivers must file a Canada Non-Resident Inter-Province Motor Vehicle Liability Insurance Power of Attorney and Undertaking (PAU). By filing the PAU, U.S. insurers agree to several criteria regarding financial responsibility for possible civil actions against insured drivers, should such civil actions arise, including a commitment to satisfy judgments at least at the minimum financial responsibility limit in the relevant province. Other relevant commitments also apply. Compliant U.S. insurers will be provided with Canada Non-Resident Inter-Province Motor Vehicle Liability Insurance Cards to distribute to insured drivers who will be motoring in Canada.
Two general liability endorsements, CG 29 10-California Changes-Cancellation and Nonrenewal (OCP) and CG 29 11-California Changes-Cancellation and Nonrenewal, have been revised to amend wording making clear that the 10-day notice of cancellation for fraud or material misrepresentation applies even when the policy has been in effect more then 60 days. Participating insurers may use these revised endorsements as of the approval date of July 18, 1997.
Approval has been received for the 12-92, 01-96 and 01-97 editions of the Businessowners Policy Multistate Program and form updates including state supplements. Major revisions are now in effect for the ISO Businessowners Program for California. Complete and thorough evaluations of the program should be conducted prior to usage in order to grasp the magnitude of changes. These changes have been approved for use by ISO participating insurers as of various dates in July and August, 1997.
CONNECTICUT
The commercial multiple line businessowners endorsement, BP 02 11-Connecticut Changes-Cancellation And Nonrenewal, has been revised as a result of notification by the Connecticut Insurance Department regarding the cancellation provision for professional liability, which was deemed not consistent with Connecticut General Statute Section 38a-324. The wording in that particular reference has been changed from "first Named Insured shown in the Declarations" to "you." This change applies to all policies effective on or after March 1, 1998.
DISTRICT OF COLUMBIA
The 1997 Multistate Revisions To The Commercial Auto Coverage Forms And Endorsements have been approved in the District of Columbia. Please refer to the Countrywide section of the October or November issues of Rough Notes magazine for more details. This change applies to all policies written on or after January 1, 1998.
FLORIDA
Six commercial lines cancellation and nonrenewal endorsements have been revised to comply with FLA. STAT. 627.4133 which states that policies in effect for 90 days or more may be cancelled for "failure to comply with the underwriting requirements established by the insurer." The underlined wording has been added.
The revised forms include:
IL 02 55-Florida Changes-Cancellation and Nonrenewal (Boiler and Machinery BOP, Commercial Inland Marine, Commercial Property and Farm)
CR 02 06-Florida Changes (Crime)
CG 02 20-Florida Changes-Cancellation and Nonrenewal (CGL, Liquor, Pollution, Products)
CG 28 61-Florida Changes-Cancellation and Nonrenewal (OCP)
CG 28 62-Florida Changes-Cancellation and Nonrenewal (Railroad)
CG 30 15-Florida Changes-Cancellation and Nonrenewal (UST)
These changes apply to all policies effective on or after March 1, 1998.
KANSAS
The 01/97 Multistate Revisions To The Businessowners Policy have been approved along with state-specific changes and provisions. In the area of eligibility, the changes include but are not limited to the following:
* Eligibility has been revised to increase the maximum square footage from 15,000 to 25,000.
* The maximum gross sales limit has been increased from $2,000,000 to $3,000,000.
* An increase in the number and type of classes of business now eligible for the BOP program include many of the artisan-type contractors, limited cooking and fast food-type restaurants (square footage on this class is 7,500), convenience stores with gasoline pumps, and laundry/dry cleaners.
Rating for the contractors classes will be split between property and liability with separate rating basis for each. Other classes will continue to use a single rating base for the present.
The base property deductible has been increased to $500 to mirror the commercial property program with an option to decrease to $250.
Program coverage enhancements include:
* full exterior glass coverage
* increase in the limit for newly acquired personal property from $10,000 to $100,000 per location
* now included is $5,000 of accounts receivable coverage
* now included is $5,000 of valuable papers coverage
* now included is $5,000 or 5% of building limit for increased cost of construction coverage as a result of ordinance or law
Options are now available to increase or add the following coverages:
* a $2,000,000 limit of liability option has been added to the liability coverage
* option to add contingent business income
* option to increase valuable papers over the $5,000 basic
* option to increase accounts receivable over the $5,000 basic
* option to add utility services equipment failure
* additional options available for money and securities coverage
* options to add professional liability for a limited number of business types
The above listed changes are only a portion of the overall multistate revisions to the BOP program. Please review the entire program carefully before using. These changes apply to all policies written on or after January 1, 1998.
MAINE
Personal Auto Endorsement PP 01 75-Amendment of Policy Provisions-Maine has been revised in response to 1997 Maine Laws (former H.B. 1036). The changed section is Our Right to Recover Payment, Part B-Medical Payments Coverage where the section has been amended to clarify that the insurer is entitled to recovery only after the injured person has been fully compensated for all damages. This change applies to all policies written on or after January 1, 1998.
MARYLAND
Two homeowners endorsements have been revised to comply with 1997 MD laws (former S.B. 17) with regard to the Lead Poisoning Prevention program (Article for Insurance, Section 19-701). The amended endorsements are: Maryland Coverage for Lead Liability Endorsement-HO 24 52 and Maryland Lead Liability Exclusion Endorsement-HO 24 51. The affected provisions within the endorsements deal with limited lead liability coverage and the definition of affected property, plus changes in language to comply with the new revisions to state law. These changes are applicable to all policies written on or after January 1, 1998.
MICHIGAN
Personal Auto Endorsement PP 05 90-Personal Injury Protection Coverage-Michigan has been revised in response to the decision of the Michigan Court of Appeals in the case of Citizens Ins. Co., of America v. Buck, 216 Mich. App. 217, 548 N.W.2d 680 (1996). The Our Right To Recover Payment Provision has been revised to allow for limited right of contractual subrogation in cases involving uninsured motorist with respect to PIP. In addition, the limit of liability for Work Loss and Survivor's Loss has been increased from $3,172 to $3,545 per month. These changes apply to all policies written on or after January 1, 1998.
NEW JERSEY
Professional Liability Endorsement CG 23 88-Amendatory Endorsement Cancellation And Nonrenewal (New Jersey) has been revised to delete the requirement for insurers to notify third parties when cancellation is for non-pay or moral hazards. These changes apply to all policies written on or after October 1, 1997.
NEW YORK
A new advisory declarations page has been developed (see Countrywide above) for use in New York for special protective highway coverage as follows:
CG DS 08 07 97 New York Special Protective Highway Declaration Page
OHIO
Commercial Automobile Endorsement CA 21 33-Ohio Uninsured Motorist Coverage-Bodily Injury has been revised in order to comply with 1997 Ohio laws (former H.B. 261). Changes include additions to the definition of what is considered to be an uninsured motor vehicle, including a vehicle whose owner or operator is undeterminable but independent corroborative evidence is available to prove that the bodily injury sustained is a result of the negligence or intentional act of an uninsured motorist. Further, an uninsured motor vehicle is not one owned by, furnished or available for the regular use of a named insured or family member; nor is it a vehicle owned by a political subdivision unless the owner or operator has immunity or diplomatic immunity; nor is an uninsured vehicle one that the insured is operating but is not covered by the policy but is owned by, furnished, or available for regular use by a named insured, spouse or family member. These changes apply to all policies written on or after December 1, 1997.
PENNSYLVANIA
Approval has been received for the 1997 Revisions to the Commercial Auto Coverage Forms and Endorsements with state-specific changes and amendments. 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 what is a customer's auto as 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; CA 23 25-Coverage For Injury To Leased Workers; and CA 20 51-Pennsylvania Snowmobiles.
Revisions have been made to endorsements as follows:
A blank line for insurers to insert a coverage not listed has been added if that coverage may be suspended by state law. UIM may now apply either in combination with UM or stand-alone. Two endorsements are amended accordingly: CA 20 15-Mobile Equipment, 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 is now 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. These changes apply to all policies written on or after December 1, 1997.
SOUTH CAROLINA
Three personal lines endorsements have been revised in response to changes in S.C. CODE ANN. Section 15-3-530(8) which provides the insured up to three years to bring action against an insurer after a loss. The condition on Suit Against Us is revised to reflect the change from one to three years accordingly. The revised endorsements are:
* HO 01 39-Special Provisions-South Carolina
* DP 01 39-Special Provisions-South Carolina
* IPL 01 41-Amendatory Endorsement-South Carolina
These changes apply to all policies written on or after January 1, 1998.
The new and revised 09 97 Multistate General Liability Endorsements Revisions designed to correspond to the Commercial Lines Manual (CLM) Classification Table changes have been approved. Please refer to the Countrywide section of the October or November issues of Rough Notes magazine for more details. This change applies to all policies written on or after January 1, 1998.
VIRGINIA
In order to comply with 1997 VA Acts (former H.B. 2276), two new mandatory commercial general liability endorsements have been developed, and compatible revisions have been made to the BOP endorsement titled Virginia Changes-BP 01 32. These changes affect the Pollution exclusion in the Commercial or Business General Liability portion of the package policy. The new changes amend the exclusion by making an exception to the exclusion for bodily injury arising out of the release or escape of smoke, fumes, vapor or soot from heating equipment in a building owned, occupied, rented or loaned to any insured. Thus, the Pollution exclusion does not apply to this type of bodily injury.
The new endorsements are CG 26 47-Virginia Changes-Amendment of Pollution Exclusion-Exception For Building Heating Equipment, which is for the CGL; and CG 31 02-Virginia Changes-Amendment of Pollution Exclusion-Exception For Building Heating Equipment, which is for the (OCP). The commercial general liability changes apply to all policies effective on or after May 1, 1998; and the BOP changes apply to all policies effective on or after January 1,
1998. *
CAUTION: Not all insurance companies use ISO forms. Some companies ask ISO to file forms, rules, and loss cost adjustments for them; other companies file for themselves. You will need to find out from each of your companies whether or not revisions or new forms will be adopted, and on what date the form, rule or loss cost adjustments will become effective.
©COPYRIGHT: The Rough Notes Magazine, 1997