AIA: Ariz. Legislature Passes Important Terrorism Exclusion, Med-Mal Liability

During the recently concluded Arizona legislative session, property/casualty insurers successfully lobbied for exclusion from insurance coverage of damage caused by terrorism, and also for medical malpractice liability reform, the American Insurance Association (AIA) said.

“Insurers were able to lobby proactively for reforms during 2005, while playing defense on familiar issues,” said Janine Gibford, AIA assistant vice president, western region. “The legislature approved an important amendment to the Arizona Standard Fire Policy allowing insurers to exclude coverage for losses caused by terrorism after December 31, 2005. This exclusion is necessary in the event that Congress fails to extend TRIA (the Terrorism Risk Insurance Act of 2002).”

“Arizona legislators also approved an important tort reform bill, SB 1036, which clarifies that a physician’s apology cannot be used as an admission of guilt and sets forth additional qualifications of expert witnesses in medical malpractice cases,” said Gibford.

The terrorism exclusions legislation (HB 2192) and medical malpractice liability reform (SB 1036) will both take effect on Aug. 12, 2005.

“An effort to limit the use of credit-related information in underwriting and rating emerged again this year, but ultimately the measure failed. Another bill, SB 1173, would have required insurers to notify policyholders any time the company changed its claims handling practices. Legislators understood this measure would have created expensive and unnecessary costs and did not approve the measure,” Gibford said.