29^th November 2002

US Terrorism Risk Insurance Act 2002

As you may know, the new US Terrorism Risk Insurance Act 2002 came into force on Tuesday 26 November 2002 and compels insurers to underwrite certain terrorism risks again from that date. This may or may not apply to your particular insurances.

Enclosed is an explanatory note, which sets out our present understanding of the basic impact of the new Act.  It appears that with effect from 26 November 2002 underwriters/insurers can now provide terrorism coverage but they have 90 days within which to inform you of any additional premium that they wish to charge in providing terrorism cover.  Thereafter, you will have 30 days to agree to that premium or otherwise it appears that the terrorism exclusion that was in force may be reinstated.

Clearly, there are many more questions that need to be answered.  We are currently consulting with the relevant broker and underwriting/insurer associations and will let you have further information in due course.

In the meantime, please contact your account director to fully discuss your particular situation.

Yours sincerely,

Nigel Weyman

Managing Director