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r ZURICH r THIS IMPORTANT DISCLOSURE NOTICE IS PART OF YOUR BOND We are making the following informational disclosures in compliance with The Terrorism Risk Insurance Act of 2002 . No action is required on your part . Disclosure of Terrorism Premium The premium charge for risk of loss resulting from acts of terrorism ( as defined in the Act) under this bond is $waived . This amount is reflected in the total premium for this bond. Disclosure of Availability of Coverage for Terrorism Losses As required by the Terrorism Risk Insurance Act of 2002 ; we have made available to you coverage for losses resulting from acts of terrorism (as defined in the Act) with terms , amounts , and limitations that do not differ materially as those for losses arising from events other than acts of terrorism. Disclosure of Federal Share of Insurance Company ' s Terrorism Losses The Terrorism Risk Insurance Act of 2002 establishes a mechanism by which the United States government will share in insurance company losses resulting from acts of terrorism (as defined in the Act) after a insurance company has paid losses in excess of an annual aggregate deductible . For 2002 , the insurance company deductible is I % of direct earned premium in the prior year; for 2003 , 7 % of direct earned premium in the prior year; for 2004 , 10% of direct earned premium in the prior year; and for 2005 , 15 % of direct earned premium in the prior year. The federal share of an insurance company ' s losses above its deductible is 90% . In the event the United States government participates in losses , the United States government may direct insurance companies to collect a terrorism surcharge from policyholders . The Act does not currently provide for insurance industry or United States government participation in terrorism losses that exceed $ 100 billion in any one calendar year. Definition of Act of Terrorism ' The Terrorism Risk Insurance Act defines " act of terrorism " as any act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States : 1 . to be an act of terrorism; I to be a violent act or an act that is dangerous to human life, property or infrastructure ; 3 . to have resulted in damage within the United States , or outside of the United States in the case of an air carrier (as defined in section 40102 of title 49, United 17 States Code) or a United States flag vessel (or a vessel based principally in the United States , on which United States income tax is paid and whose insurance coverage is subject to regulation in the United States) , or the premises of a United States mission; and 4 . to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. But, no act shall be certified by the Secretary as an act of terrorism if the act is committed as part of the course of a war declared by Congress (except for workers ' compensation) or property and casualty insurance losses resulting from the act, in the aggregate, do not exceed $ 5 , 000 , 000. rThese disclosures are informational only and do not modify your bond or affect your rights under the bond. Copyright Zurich American Insurance Company 2003 4050749 . doc r