Insurers doing business in urban areas need to examine their business plans to make sure they understand how both the federal Terrorism Risk Insurance Act (TRIA) and unfair discrimination law could affect their business, according to the Urban Insurance Partners Institute (UIPI).
“We advise companies to create an ongoing compliance team that reviews policies and endorsements,” said Mike Trier, partner at Lord, Bissell & Brook, a Chicago-based law firm. “Since the reauthorization of TRIA for periods after Dec. 31, 2005, is still uncertain, it is important to prepare now for both a hard and soft landing when TRIA terminates.” Trier will tell companies how to get ready for either eventuality during the UIPI national Urban Insurance Advantage workshop Oct. 27 in Chicago.
“TRIA was meant to be a temporary solution, and we understand that TRIA’s congressional backers are reluctant to extend the program beyond 2007,” said UIPI President Suzanne Reade. “Companies should make sure that in an effort to limit their long-term exposure, they don’t take any legal missteps in the urban arena.”
Many corporations are backing extension of the Terrorism Act. “Insurers and the business community, particularly those in urban areas, have strongly encouraged Congress to extend TRIA while other alternatives to protecting businesses and the economy are examined,” said Donald Griffin, vice president of commercial insurance for the Property Casualty Insurers Association of America. Griffin, along with Trier, will review the current status of TRIA and its impact on urban insurance coverage at the UIPI workshop.
In addition to legal and regulatory speakers, the RAND Corporation’s Center for Terrorism Risk Management Policy will present its work in establishing a new framework for national terrorism risk management. The RAND Corporation is working with insurers and commercial policyholders on terrorism modeling, and using this research to develop risk management options.
“We are looking at a broad range of issues and questions, including to what extent risks should be pooled; to what extent losses should be pre-funded or post-funded; and whether terrorism insurance should be mandatory or voluntary,” said Robert Reville, co-director, RAND Corporation Center for Terrorism Risk Management Policy.
The UIPI workshop, for life and property casualty insurers and reinsurers, will also feature Illinois Acting Insurance Director, Deirdre Manna, and Massachusetts Insurance Commissioner, Julianne M. Bowler, along with risk management experts and urban and emerging markets executives who will share their strategies for success.