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<br />.STPAUL <br />TRAVELERS <br /> IMPORTANT DISCLOSURE NOTICE OF TERRORISM <br /> INSURANCE COVERAGE <br />On Nov. 26, 2002, President Bush signed into law the Terrorism <br />Risk Insurance Act of 2002 (the "Act"). The Act establishes a <br />short-term program under which the federal government will share <br />in the payment of covered losses caused by certain acts of <br />international terrorism. We are providing you with this notice to <br />inform you of the key features of the Act, and to let you know what <br />effect, if any, the Act will have on your premium. <br />Under the þ,ct, insurers are required to provide coverage for <br />certain losses caused by international acts of terrorism as defined <br />in the Act. The Act further provides that the federal government <br />will pay a share of such losses. Specifically, the federal <br />government will pay 90 percent of the amount of covered losses <br />caused by certain acts of terrorism, which is in excess of an <br />insurer's statutorily established deductible for that year. The Act <br />also caps the amount of terrorism-related losses for which the <br />fede ral government or an insurer can be responsible at <br />$100 billion, provided that the insurer has met its deductible. <br />Please note that passage of the Act does not result in any change <br />in coverage under the attached policy or bond (or the policy or <br />bond being quoted). Please also note that no separate additional <br />premium charge has been made for the terrorism coverage <br />required by the Act. The premium charge that is allocable to such <br />coverage is inseparable from and imbedded in your overall <br />premium, and is no more than one percent of your premium. <br />II. T-1018 (9/04) <br /> - <br />