The business-backed Coalition to Insure Against Terrorism (CIAT) says it welcomes the recent request by the President’s Working Group on Financial Markets (PWG) for public comments on a long-term terrorism insurance solution but hopes that the analysis of the issue not stop there.
“(T)his public request for comments should not discharge the mandate from Congress that the PWG perform the required analysis of the terrorism insurance issue in consultation with the National Association of Insurance Commissioners, representatives of the insurance and securities industries, and representatives of policyholders,” CIAT stated.
Martin L. DePoy, a CIAT spokesperson, said policymakers must consider whether there is any evidence that insurers’ confidence in modeling and underwriting terrorism risk has improved significantly since the enactment of the Terrorism Risk Insurance Act of 2002 (TRIA).
Additionally, continued warnings from the insurance industry concerning lack of private reinsurance capacity for terrorism losses and the general hardening of the insurance market following the 2005 hurricane season have created doubt about the economy’s ability to recover if a terrorist attack occurs in a post-TRIA environment, according to DePoy.
Overcoming these challenges is necessary to ensuring that terrorism risk insurance remains available and affordable for policyholders on a long-term basis, DePoy said.
“CIAT urges the PWG to follow up its request for comments with an iterative and specific consultative process with each of the four groups identified by Congress, including of course the consumers who purchase terrorism risk insurance policies,” DePoy said.
CIAT’s full comments can be seen on its Web site at www.insureagainstterrorism.org.
Source: The Coalition to Insure Against Terrorism
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