With the Senate not addressing the issue of federal terrorism reinsurance legislation before the end of the year, The Risk and Insurance Management Society Inc. (RIMS) expressed its disappointment. The Jan. 1 renewal date for most property/casualty policies required immediate action by the Senate. Already RIMS member companies are experiencing terrorism exclusions in their policies, as South Dakota, Colorado, Idaho and Massachusetts have already approved terrorism exclusions for insurers.
“The Senate dropped the ball,” said David Mair, RIMS president and associate director of risk management, United States Olympic Committee. “This is an issue for the economy and for policy holders, and this inaction will significantly impact the ability of businesses to obtain adequate insurance. We’ve already seen a drastic rise in costs, sharply diminished limits, withdrawal of coverage, and notice of non-renewal in order to add terrorism exclusion.
“Congress has left the infrastructure of our industry too deeply damaged to be able to withstand another catastrophic incident.” Mair continued, “My hope is that Congress will address the regional politics and the tort-law provisions swiftly, so all policy holders will not suffer in the meantime.”
According to the RIMS, over time, lack of a federal reinsurance program will considerably impact the U.S. economy — an economy already struggling to recover from recession. Rapidly rising coverage costs will continue, as the actual insurance coverage will undoubtedly shrink.