**INTERNATIONAL BUSINESS MACHINES CORPORATION**
MAIL DROP 109
ARMONK, NY 10504-1722

**ECO (17) 54 08 82 46**
From 05/21/2016 To 05/21/2017

**(212) 441-1000**
AON RISK SERVICES NORTHEAST, INC
199 WATER ST
NEW YORK, NY 10038-3526

**TERRORISM INSURANCE PREMIUM DISCLOSURE AND OPPORTUNITY TO REJECT**

This notice contains important information about the Terrorism Risk Insurance Act and its effect on your policy. Please read it carefully.

**THE TERRORISM RISK INSURANCE ACT**

The Terrorism Risk Insurance Act, including all amendments ("TRIA" or the "Act"), establishes a program to spread the risk of catastrophic losses from certain acts of terrorism between insurers and the federal government. If an individual insurer's losses from certified acts of terrorism exceed a specified deductible amount, the government will reimburse the insurer for a percentage of losses (the "Federal Share") paid in excess of the deductible, but only if aggregate industry losses from such acts exceed the "Program Trigger". An insurer that has met its insurer deductible is not liable for any portion of losses in excess of $100 billion per year. Similarly, the federal government is not liable for any losses covered by the Act that exceed this amount. If aggregate insured losses exceed $100 billion, losses up to that amount may be pro-rated, as determined by the Secretary of the Treasury.

The Federal Share and Program Trigger by calendar year are:

| Calendar Year | Federal Share | Program Trigger |
|---------------|---------------|----------------|
| 2015          | 85%           | $100,000,000    |
| 2016          | 84%           | $120,000,000    |
| 2017          | 83%           | $140,000,000    |
| 2018          | 82%           | $160,000,000    |
| 2019          | 81%           | $180,000,000    |
| 2020          | 80%           | $200,000,000    |

**MANDATORY OFFER OF COVERAGE FOR "CERTIFIED ACTS OF TERRORISM" AND DISCLOSURE OF PREMIUM**

TRIA requires insurers to make coverage available for any loss that occurs within the United States (or outside of the U.S. in the case of U.S. missions and certain air carriers and vessels), results from a "certified act of terrorism" AND that is otherwise covered under your policy.

A "certified act of terrorism" means:

[A]ny act that is certified by the Secretary [of the Treasury], in consultation with the Secretary of Homeland Security, and the Attorney General of the United States.

(i) to be an act of terrorism;

**NP 73 12 01 15**
© 2015 Liberty Mutual Insurance
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