COUNTRYWIDE
Commercial Crime and Fidelity Form Changes
The entire crime program has been rewritten. Gone are the ABC forms. New for ISO are employee theft, forgery or alteration, client's property and funds transfer coverages. Seven coverage grants (eight for government crime) have been combined onto one primary coverage form (CR 00), although one or more coverage grants can be excluded. Additional coverage grants can be added by endorsement. Most of the current endorsements remain the same but all are renumbered. New endorsements for existing coverages and new coverage grants have been added. (For more details on this change, please refer to the PF&M Companion in the May 2000 issue of Rough Notes magazine at http://www.roughnotes.com.)
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after July 1, 2000.
ALASKA
Personal Auto--Alaska has adopted the 06/98 revisions to the Personal Auto Policy effective for policies written on or after July 1, 2000. Revisions from the existing form are extensive and beyond this summary. For those who are familiar with the 6-94 form, the following changes have been made: (This recap is not "all inclusive." Please research and evaluate the new forms and endorsements carefully before using.)
* The definition of "you" and "your" has been revised to give 90-day temporary coverage to separated spouses and immediate family members while a new residence is sought or a replacement policy has been secured, whichever comes first.
* Pickups and vans that are leased for at least six months or more are now added to the definition of private passenger type autos.
* A new definition has been added for "newly acquired autos," and the coverage applying to the newly acquired auto will be the broadest coverage of any vehicle currently listed on the policy instead of just the coverage of the vehicles it replaces.
* Defense coverage has been reworded to clarify that once the limit of liability has been exhausted--whether by a settlement or a judgment--defense coverage ceases.
* Loss of earnings under Supplementary Payments is increased from $50 per day to $200.
* With reference to a non-owned pickup or van, previously only those non-owned pickups or vans that were temporary substitutes were covered for business use. Any such that was rented or borrowed was not covered. In this new revision, liability for the business use of rented or borrowed non-owned pickups and vans has been added.
* The "reasonable belief" exclusion has been revised so that it no longer applies to a family member while using a covered auto belonging to the insured.
* The Nuclear Energy Exclusion has been revised to update the name of American Nuclear Insurers to Nuclear Energy Liability Insurance Association.
* Liability protection for non-owned golf carts has been added.
* The limits of liability for Part A--Liability Coverage, Part C-Uninsured Motorist Coverage and for Underinsured Motorists Coverage will now be on a split limits basis.
* With respect to both Uninsured Motorist Coverage and Underinsured Motorists Coverage, the Other Insurance provision has been revised to clarify that the PAP will be on an excess basis over any other collectible UM or UIM (or other similar type coverage) not over any other automobile coverage.
* The coverage built into the policy for temporary transportation expenses has been increased to $20 per day with a $600 maximum.
* Physical damage coverage for permanently installed telephones is added and the sub-limit for aftermarket sound reproducing equipment is increased to $1,000. That amount can be increased for additional premium.
Again, the items listed above are highlights of only some, not all, of the changes and revisions.
Alaska-specific endorsements include:
* PP 01 97 02 00 Amendment of Policy Provisions-Alaska
* PP 03 42 02 00 Coverage For Damage to a Rental Vehicle-Alaska
* PP 04 93 02 00 Uninsured/Underinsured Motorists Coverage-Alaska
* PP 04 94 06 98 Single Uninsured/Underinsured Motorists Limit-Alaska
Personal Auto--The Coverage
for Damage to Your Auto Exclusion PP 13 01 12 99 endorsement has been approved for participating insurers for all policies written on or after June 1, 2000. This endorsement has been filed countrywide and adds a new definition called "Diminution in value" which means the actual or perceived loss in market or resale value that results from a direct and accidental loss. Diminution in value is then excluded.
ARIZONA
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after July 1, 2000.
ARKANSAS
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after July 1, 2000.
Personal Auto--Amendment of Policy Provisions-Arkansas PP 01 77 08 99 has been revised for participating insurers for all policies written on or after August 1, 2000. The change is to provide liability coverage for a temporary substitute snowmobile if insured snowmobile is out of service because of breakdown, repair, servicing, loss or destruction. (Applies only when snowmobile endorsement is attached.)
Underinsured Motorists Coverage-Arkansas PP 04 34 08 99 has been revised for participating insurers for all policies written on or after August 1, 2000. This changes the company's right to recover (subrogation) underinsured motorists coverage payments only if the person has been fully compensated for damages.
CALIFORNIA
Commercial Auto--The 1997 and 1998 multistate revisions to the Commercial Auto Program are approved for use by participating insurers. For more information on these changes see the March 1999 issue of Rough Notes magazine's "ISO's Commercial Auto Multistate Program Changes," by Diana Kowatch, CPCU, AU, AAM, and the August 1997 "ISO Form and Endorsement Changes." Available at http://www.roughnotes.com.
Also approved were the following California Specific Endorsements:
* CA 20 26 07 00 California Changes-Leasing or Rental Concerns-Contingent Coverage
* CA 21 54 07 00 California Uninsured Motorists Coverage-Bodily Injury
COLORADO
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers and will carry a distribution date of July 2000.
CONNECTICUT
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies effective on or after September 1, 2000.
DELAWARE
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after July 1, 2000.
FLORIDA
Homeowners--Special Provisions-Florida HO 01 09 09 99 has been revised and is approved for use by participating insurers for all policies effective on or after July 1, 2000. This change is in response to two cases: Michigan Millers Mut. Ins. Corp. v. Benfield, 140 F.3d 915 (11th Cir. 1998) and State Farm Fire and Cas. Co. v. CTC Dev. Corp. 720 So. 2d 1072 (Fla. 1998).
In the Benfield case, Michigan Millers argued it had no liability when the spouse of the insured intentionally set fire to the home. The court disagreed, finding that the policy was not clear regarding whether or not the term "insured" established joint or several liability for the spouses. Citing ambiguity, the court ordered the innocent spouse to be paid.
The CTC case also dealt with an intentional claim and an innocent second insured. In CTC the court found that the expected or intended exclusion did not apply because there was no definition of accident in the policy. Absent a definition, the court was bound to define accident to include accidental means as well as damages not expected or intended from the standpoint of the insured.
The change in the endorsement eliminates the intentional loss exclusion in the Homeowners policy and replaces it with language that defines intentional as "any loss arising out of any act an 'insured' commits or conspires to commit with the intent to cause a loss." In the event of that loss NO insured is covered even if innocent insureds were not involved in the fraudulent acts that caused the loss.
Dwelling Liability--Special Provisions-Florida DL 25 09 09 99 has been revised and is approved for use by participating insurers for all policies effective on or after July 1, 2000. Changes were made in response to the CTC case noted above. The Expected or Intended exclusion is deleted from the policy and replaced by language that excludes expected or intended injuries even if the insured intended a different result or the loss is sustained by someone different than originally intended, e.g., you expected the ball to hit Joe, but Mike drove past on his bicycle and was hit by the ball before it hit Joe.
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after September 1, 2000.
Commercial Auto--Florida Uninsured Motorists Coverage-Stacked CA 21 47 09 00 and Florida Uninsured Motorists Coverage-Non-Stacked CA 21 72 09 00 have been revised and are available for use by participating insurers for all policies effective on or after October 1, 2000.
Changes are in response to State Farm Mutual Auto Insurance Company v. Dixon 732 So. 2d 1 (Fla. 3rd DCA 1999). The court confirmed that damages for pain and suffering can be paid only if the injury exceeds the threshold as stated in Fla. Stat. Sec. 627,737(2)(a)-(d) before the insurer is liable for payment. Covered under the Florida statute are injuries that cause permanent loss of a bodily function, permanent injury other than scarring, significant scarring or disfigurement or death. The changes in the endorsements reflect the intent of the statute and exclude coverage for non-economic damages for lesser injuries.
IDAHO
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after July 1, 2000.
ILLINOIS
General Liability--Illinois Changes-Contractors-Home Repair and Remodeling CG 26 59 06 00 has been introduced and is available for participating insurers for all policies written on or after July 1, 2000. This new endorsement is in response to Illinois Law, Former House Bill 1177, that requires home repair and remodeling companies to obtain coverage for improper home remodeling not in conformance with state or local building codes. This law applies only to remodelers with a net worth less than $1 million. Net worth is determined on the basis of a financial statement less than 13 months old.
The coverage required is $10,000 and applies to residential properties containing six or fewer units. Limits higher than $10,000 can be purchased. Coverage must also apply to projects under $1,000 in value and any project over $1,000 in value if a written contract or work order was provided prior to the project inception. (Written contracts are required for jobs worth more than $1,000.) The endorsement reflects these requirements but includes a $500 deductible. Exclusions are expected or intended injury, assumptions of liability in a contract unless the insured would have been liable in the absence of a contract, fines and penalties, owned property, ongoing work, pollution and new construction.
Businessowners--Illinois Changes-Contractors-Home Repair and Remodeling BP 01 62 06 00 has been introduced and is available for participating insurers for all policies written on or after July 1, 2000. This endorsement is similar to and deals with the same statute as discussed above in General Liability.
IOWA
Commercial Crime--Iowa Changes CR 02 39 03 00 has been approved for participating insurers for all policies written on or after July 1, 2000.
KANSAS
Commercial Crime--Kansas Changes CR 02 30 03 00 has been approved for use by participating insurers for all policies written on or after July 1, 2000. This endorsement applies to commercial crime, government crime and employee theft and forgery policies.
Kansas Changes CR 01 04 03 00 has been approved for use by participating insurers for all policies written on or after July 1, 2000. This endorsement applies to commercial crime and government crime coverage forms.
Homeowners--Special Provisions-Kansas has been revised for use by participating insurers for all policies written on or after April 1, 2000. This change is in response to the case Brumley v. Safeco Ins. Co. of America, ___P.2.d. ___(Kan. 1998). In this case, the Brumleys left their son in the care of Kimberly and David Lee at the Lees' home. The child died due to injuries inflicted by Kimberly. The Brumleys wanted coverage from David Lee's homeowners policy. Safeco denied coverage and won the case on summary judgment because the occurrence was not an accident. The Kansas Supreme Court overturned the ruling on appeal. The court reasoned that since accident was not defined, the policy was ambiguous in specifying from whose perspective the occurrence would be considered an accident.
The Expected or Intended exclusion is deleted from the policy and replaced by language that excludes expected or intended injuries even if the insured intended a different result or the loss is sustained by someone different than originally intended, e.g., you expected the ball to hit Joe, but Mike drove past on his bicycle and was hit by the ball before it hit Joe.
Dwelling Liability--Special Provisions-Kansas DL 01 15 12 99 and DL 98 49 12 99 has been revised for use by participating insurers for all policies written on or after April 1, 2000. These changes correspond to the changes in Homeowners discussed above that are as a result of the Brumley case.
Professional Liability--Professional Liability Simplified Multistate Forms and Endorsements are approved for participating insurers for all policies written on or after June 1, 2000.
In order for the Medical Malpractice Professional Liability Program to become current with the American health care industry, revisions and updates have been made to it in the format of new coverage forms and endorsements. Simplified language has been developed to modernize both the occurrence and claims-made coverage forms and endorsements. The non-simplified forms will no longer be supported by ISO.
The new Medical Malpractice Program includes forms and endorsements for Physicians, Surgeons, Dentists, Hospital Professional, Allied Health Care Provider, Blood Banks, Diagnostic Testing Laboratories, Optometrists and Veterinarians.
With this revision, the Lawyers Professional Liability Program has been withdrawn.
The following state-specific forms were also approved:
* PR 01 48 05 99 Kansas Changes-Hospitals
* PR 02 11 05 99 Kansas Changes
* PR 02 12 05 99 Kansas Changes-Cancellation and Nonrenewal
* PR 03 12 05 99 Kansas Changes-Deductible Liability Insurance
* PR 03 13 05 99 Kansas Changes-Deductible Liability Insurance
* PR 03 14 05 99 Kansas Changes-Deductible Liability Insurance
* PR 03 15 05 99 Kansas Changes-Deductible Liability Insurance
* PR 21 08 05 99 Kansas Changes-Exclusion of Coverage When Professional Liability Insurance Was Not In Effect
* PR 24 09 05 99 Kansas Changes-Binding Arbitration
* PR 25 06 05 99 Kansas Changes-Coverage B.-Separate Limits for Each Named Insured
*Employment Related Practices--The employment Related Practices Liability Program (Division 11) has been approved for use in Kansas by participating insurers for all policies written on or after June 1, 2000. For more information about this program, please consult "ISO Addresses 'Prevalent Problem', An overview of ISO's new employment-related practices liability program," by Diana Kowatch, CPCU, AU, AAM, CPIW, in the March 1998 issue of Rough Notes magazine at http://www.roughnotes.com.
KENTUCKY
Commercial Crime--Kentucky Changes CR 02 32 03 00 has been approved for use by participating insurers for all policies written on or after July 1, 2000. This endorsement applies to commercial crime, government crime and employee theft and forgery policies.
Commercial Auto, General Liability--Binding arbitration is not permitted in Kentucky. Therefore binding arbitration endorsements and language is being withdrawn and non-binding arbitration language submitted in its place. Changes are effective for use by participating insurers for all policies written on or after June 1, 2000. The following endorsements are affected:
* Commercial Auto--CA 21 76 05 00 Kentucky Uninsured Motorists Coverage
* Commercial Auto--CA 21 79 05 00 Kentucky Uninsured Motorists Coverage
* General Liability--CG 26 10 04 00 Kentucky Changes-Non-Binding Arbitration
LOUISIANA
Personal Auto--Amendment of Policy Provisions-Louisiana-PP 01 95 02 00 has been revised and is approved for use by participating insurers effective June 1, 2000. This change is in response to an August 15, 1999 law (formerly Senate Bill 499) that deletes a requirement that policies contain a clause giving the insured the right to remove an agent. This clause has been removed.
MAINE
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after July 1, 2000. In addition a Maine-specific endorsement has been approved--CR 02 22 03 00 Maine Changes.
MICHIGAN
Commercial Crime--Michigan Changes-CR 02 46 03 00 has been approved for use by participating insurers for policies written on or after July 1, 2000.
MISSOURI
Commercial Property--A new endorsement, Missouri-Calculation of Additional Premium CP 01 28 07 00,has been approved for use by participating insurers for all policies written on or after July 1, 2000. The new endorsement informs insureds that any changes made to the policy, e.g., increasing the limit of insurance, will be made at rates in effect at the time of the change, not at the time of the inception of the policy. The same applies to additional locations.
NEBRASKA
Commercial Crime--A Nebraska-specific amendatory endorsement, Nebraska Changes-CR 02 28 03 00, has been approved for use by participating insurers for policies written on or after July 1, 2000.
NEVADA
Commercial Crime--A Nevada-specific amendatory endorsement, Nevada Changes-CR 02 25 03 00, has been approved for use by participating insurers for policies written on or after July 1, 2000.
NEW JERSEY
Commercial Crime--A New Jersey-specific amendatory endorsement, New Jersey Changes-CR 02 13 03 00, has been approved for use by participating insurers for policies written on or after July 1, 2000.
NORTH CAROLINA
Commercial Crime--A North Carolina-specific amendatory endorsement, North Carolina Changes-CR 02 35 03 00, has been approved for use by participating insurers for policies written on or after September 1, 2000.
North Carolina Changes-Legal Action Against Us CR 01 01 03 00 has been revised and is approved for use by participating insurers for policies written on or after September 1, 2000. The changes made adjust the language to dovetail with the new crime insurance program.
NORTH DAKOTA
Commercial Crime--A North Dakota-specific amendatory endorsement, North Dakota Changes-CR 02 50 03 00, has been approved for use by participating insurers for policies written on or after July 1, 2000.
Commercial Automobile--North Dakota Changes-Cancellation and Nonrenewal Endorsement PA 02 05 07 00 has been revised and is approved for use by participating insurers for policies written on or after July 1, 2000. The only change is to eliminate paragraph A.3.c., that included language giving the insurer the right to replace an existing policy form with a similar policy form.
PUERTO RICO
Employment Related Practices--The Employment Related Practices Liability Program (Division 11) forms have been approved for use in Puerto Rico by participating insurers for all policies written on or after September 1, 2000. For more information about this program, please consult "ISO Addresses 'Prevalent Problem', An overview of ISO's new Employment-Related Practices Liability Program," by Diana Kowatch, CPCU, AU, AAM, CPIW, in the March 1998 issue of Rough Notes magazine at http://www.roughnotes.com.
In addition, Puerto Rico Changes-EP 02 04 04 98 has been approved for this program with a September 1, 2000, effective date.
SOUTH CAROLINA
Commercial Crime--Commercial crime and fidelity program changes referred to in the Countrywide section have been approved for participating insurers for all policies written on or after July 1, 2000. Also approved is South Carolina Changes-CR 02 23 00 with a July 1, 2000, effective date.
VIRGINIA
Personal Auto--The Virginia Insurance department has, by administrative order, established that the ISO simplified personal auto policy and endorsements are readable standard forms for use by all insurers. The forms and endorsements are available for use by participating insurers on or after September 1, 2000. A number of Virginia-specific endorsements were also approved.
The new forms are those associated with the 1998 ISO Personal Auto Policy changes. For more information on these new forms see "Changes to the ISO PAP," by Bruce Hicks, CPCU, CLU, July 1998 edition of Rough Notes magazine and the "PF&M Companion" from the May 1998 issue of Rough Notes magazine at http://www.roughnotes.com.
Dwelling and Homeowners--A notice must be provided with every new and renewal policy that excludes flood. This notice has no form number but states that the policy does not provide coverage for water damage related to flood. It recommends that the insured contact an agent or the National Flood Insurance Program for flood insurance coverage. *
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