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Texas insurance companies have been quiet in the wake of the recent announcement by the Texas Department of Insurance regarding restrictions relating to Year 2000 issues, according to a report in Independent Insurance Agents of Texas' "Texas Agent" newsletter.
"When IIAT contacted several major Texas liability carriers about this ruling, the consensus was 'no comment,'" the report states. "Most companies seem to be waiting to see what the Insurance Services Office will do."
TDI announced in a recent bulletin that insurers will be permitted to attach commercial and professional liability insurance policy add-ons (endorsements) to specifically exclude coverage for Y2K exposures, subject to certain conditions limiting their scope and application.
Y2K exposures arise out of possible malfunctions that may occur in any product containing an electronic chip or timer that registers only the last two digits of a year and may interpret "00" as 1900 instead of 2000. Some observers fear that society will shut down on Jan. 1, 2000, as malfunctions occur in computers, elevators, alarm clocks, traffic signals and everything else that depends on computer chips.
The TDI directive mainly relates to insurance companies' ability to exclude or limit the coverage of small business and professional people against liability losses caused by the Year 2000 computer problems.
Insurance companies also were directed to add Year 2000 issues to the loss control …