GENERAL CIRCULARS - 2005

 

TAC/ 1  /05                                                                        January 28, 2005

 

Re: Cover for Terrorism Risks under   Fire, Engineering  & IAR Tariffs

 

 

            This refers to our circular no.TAC/4/04 dated December 16, 2004.  The Authority has approved the following clarifications effective from February 1, 2005:

 

1.                  It is not permissible for the Terrorism risk  endorsement to be cancelled and re-written effective from February 1, 2005 or any later date in order to take advantage of the reduction in rates for insurances effected on or after February 1, 2005.  If an insured chooses  to cancel a policy and have a fresh policy issued, on such a policy, the old rates continue to apply until the next renewal date.

     

2.                  The endorsement extending insurance for Terrorism risk shall carry the following cancellation clause:

     

            “Notwithstanding the cancellation provisions relating to the basic insurance policy on which this endorsement is issued, there shall be no refund of premium allowed for cancellation of the Terrorism risk insurance during the period of insurance except where such cancellation is done along with the cancellation of the basic insurance.  Where a policy is cancelled and rewritten mid-term purely for the purpose of coinciding with the accounting year of the insured, pro-rate refund of the cancelled policy premium will be allowed.

           

            If the cancellation is for any other purpose, refund of premium will only be allowed after charging short term scale rates as per Tariff.”

           

3.                  In order to correspond with the increased cover on insurances of Terrorism risk attaching on or after February 1, 2005, the limit of insurance on existing insurance of Terrorism risk shall stand automatically increased to Rs.500 crores per event per location.

           

                 Insurers are requested to inform their operating offices suitably.

           

    Secretary

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