50.21—Make available.
(a) General.
The requirement to
make available coverage as provided in § 50.20
applies to policies in existence on November 26,
2002, and new policies issued and renewals of
existing policies during the period beginning on
November 26, 2002 and ending on December 31, 2002,
and in any Program Year thereafter. Except as
provided in paragraph (c) of this section, the
requirement applies at the time an insurer makes
the initial offer of coverage as well as at the
time an insurer makes an initial offer of renewal
of an existing policy.
(b)
Offer consistent with amended
definition of act of terrorism. An insurer
must make available coverage for insured losses in
a policy of property and casualty insurance
consistent with the definition of an act of
terrorism as amended by the Terrorism Risk
Insurance Program Reauthorization Act of 2007
beginning with the first initial offer of coverage
or offer of renewal of the policy made on or after
December 26, 2007. Notwithstanding this
requirement, if an insurer makes an offer of
coverage on or after December 26, 2007 on a policy
that is in mid term, then the insurer must make
available coverage for insured losses consistent
with the definition of an act of terrorism.
(c)
Rules concerning extension of
Program. (1) Special Program Year 4
requirement for certain new policies issued and
renewals of existing policies in Program Year
3. If coverage for insured losses under a
policy of property and casualty insurance (as
defined by the Act, as amended) expired as of
December 31, 2005, but the remainder of coverage
under the policy continued in force in Program
Year 4, then an insurer must make available
coverage as provided in § 50.20 for insured losses
for the remaining portion of the policy term in
the manner specified in
paragraphs (e)(1) and (e)(2) of this section. This
requirement does not apply if during Program Year
3 a policyholder declined an offer of coverage for
insured losses made at the time of the initial
offer of coverage or offer of renewal of the
existing policy.
(2)
Special 2008 requirement for
certain policies where coverage expired. If
coverage for insured losses under a policy of
property and casualty insurance expired as of
December 31, 2007, but the remainder of coverage
under the policy continued in force in 2008, then
an insurer must make available coverage as
provided in § 50.20 for insured losses for the
remaining portion of the policy term in the manner
specified in paragraphs (e)(1) and (e)(4) of this
section. However, if a policyholder declined an
offer made by an insurer for such coverage
expiring as of December 31, 2007, then the insurer
is not required to make a new offer of coverage
for insured losses before any offer of
renewal.
(d)
Changes negotiated subsequent to
initial offer. If an insurer satisfies the
requirement to “make available” coverage as
described in § 50.20 by first making an offer with
coverage for insured losses that does not differ
materially from the terms, amounts, and other
coverage limitations applicable to losses arising
from events other than acts of terrorism, which
the policyholder declines, the insurer may
negotiate with the policyholder an option of
partial coverage for insured losses at a lower
amount of coverage if permitted by any applicable
State law. An insurer is not required by the Act
to offer partial coverage if the policyholder
declines full coverage. See § 50.24.
(e) Demonstrations of compliance.
(1) No contract.
If an insurer makes
an offer of insurance but no contract of insurance
is concluded, the insurer may demonstrate that it
has satisfied the requirement to make available
coverage as described in § 50.20 through use of
appropriate systems and normal business practices
that demonstrate a practice of compliance.
(2)
Policy periods beginning in
Program Year 3. If an insurer must make
available coverage for insured losses as required
by paragraph (c)(1) of this section for a policy
whose coverage period began in Program Year 3 but
extends into Program Year 4, then the insurer must
be able to demonstrate to Treasury's satisfaction
that it has offered such coverage by January 1,
2006, or as soon as possible following that
date.
(3)
Coverage becoming effective in
Program Year 4. If an insurer processed a new
policy or policy renewal in Program Year 3 for
coverage becoming effective in Program Year 4, but
did not make available coverage for insured losses
as required by § 50.20 by January 1, 2006, then
the insurer must be able to demonstrate to
Treasury's satisfaction that it has provided an
offer of coverage for insured losses as soon as
possible following that date.
(4)
Coverage expired as of December
31, 2007. If an insurer must make available
coverage for insured losses under the
circumstances described in paragraph (c)(2) of
this section, the insurer must be able to
demonstrate to Treasury's satisfaction that it has
offered such coverage as soon as possible
following January 1, 2008.
(5)
Coverage becoming effective in
2008. (i) No coverage. If an
insurer processed a new policy or policy renewal
in 2007 or in the first three months of 2008 for
coverage becoming effective in 2008, but did not
make available coverage for insured losses as
required by § 50.20(a), then the insurer must be
able to demonstrate to Treasury's satisfaction
that it has provided an offer of coverage for
insured losses as soon as possible following
January 1, 2008.
(ii)
Not consistent with amended
definition of act of terrorism. If an insurer
made an initial offer of coverage or offer of
renewal on or after December 26, 2007 for a policy
term becoming effective in 2008, and made
available coverage for insured losses, but the
scope of the coverage for insured losses in the
offer was not consistent with the definition of an
act of terrorism as amended by the Terrorism Risk
Insurance Program Reauthorization Act of 2007,
then the insurer must be able to demonstrate to
Treasury's satisfaction that it
has provided a new offer of coverage as soon as
possible following January 1, 2008. If an insurer
made an initial offer of coverage or offer of
renewal before December 26, 2007, for a policy
term becoming effective in 2008, and the insurer
made available coverage for insured losses in
compliance with the Act and the definition of an
act of terrorism in effect at the time of the
offer, then the insurer is not required to make a
new offer of coverage before the policy is due to
be renewed by its terms, regardless of whether the
offer was accepted or rejected.