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Since the events of September 11, 2001, marine and non-marine reinsurance markets in the United States and abroad have been made aware and have grown concerned over the impact of "NBC" terrorist events: losses which may arise from Nuclear, Chemical or Biological means. Many professionals in the insurance industry consider the losses that could arise from "NBC" type terrorist event to be unquantifiable, and hence not insurable. In November of 2002 the London Institute released two forms for use on direct and reinsurance policies. The first addressed "Extended RACE" and the second Chemical, Biological, Etc. exclusions.

At the beginning of this year (2003) American reinsurers requested that "NBC" clauses be added to reinsurance contracts for their American cedents on or about March 1, 2003. This time period was allowed to give the American marine community an opportunity to develop "NBC" clauses mutually agreeable to both underwriters and reinsurers. With TRIA and other matters facing insurers, this March 1st date was not met, but the reinsurers were requesting implementation of these clauses as soon as practicable.

In an attempt to develop "NBC" clauses that would achieve consensus in the American market various committees of the AIMU met. The Reinsurance Committee drafted an American version of the London clauses. A Forms & Clauses committee made up of both direct and reinsurance underwriters was also formed to review these clauses and make suggested changes. The clause is the result of these committees' efforts and may be placed on reinsurance contracts.