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Commissioner Rejects War Exclusion

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NU Online News Service, Sept. 24, 3:32 p.m. – Minnesota’s commerce commissioner Jim Bernstein says that insurance companies that have written insurance policies that would otherwise cover the loss of life and property that resulted from the Sept. 11 terrorist attacks in New York, Washington and Pennsylvania should not invoke an “act of war exclusion.”

“It seems clear that the attacks in New York, on the Pentagon, or on the plane that crashed in Pennsylvania do not constitute ?acts of war’ as contemplated by the language of these exclusions,” Bernstein says. “An ?act of war’ must be committed by a foreign government, a sovereign, or at least a recognizable authority utilizing military force.

“The United States Congress has forcefully stated its position on this issue. Within days after the attacks, the chairs of the House Financial Services Committee and the Insurance Subcommittee signed a letter directed to the National Association of Insurance Commissioners declaring that ?through necessity our government is expressing America’s outrage through words of war. But this rhetoric reflects the passion and determination of our country, not the legal reality of Tuesday’s destruction. Any attempt to evade coverage obligations by either primary insurers or reinsurers based on such legal maneuvering would not only be unsupportable and unpatriotic — it would tear at the faith of the American people in the insurance industry.’ I agree, as do other state insurance regulators.”

Bernstein says that the insurance industry has largely been fair in paying claims related to the attacks. If an insurer were to invoke the act of war exclusion, the commissioner says he would not hesitate to intervene on behalf of the policyholder.

“I will call upon every resource available to me to guarantee that every insurance company under the authority of this department fulfills its contractual, moral, and patriotic obligations to those who suffered loss of life or property as a result of these tragic events,” Bernstein says.


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