The following statement can be attributed to Carl Parks, senior vice president of government affairs for the National Association of Independent Insurers (NAII):
“House Financial Services Committee Chairman Michael Oxley is to be commended for conducting yesterday’s hearing to determine insurers’ response to a catastrophe of unprecedented scope. As the testimony pointed out, insurers are settling claims resulting from the September 11 terrorist attacks in New York, Washington, and Pennsylvania, confident that the industry has the resources to meet its financial obligations. Moreover, insurers take the responsibility of helping individuals and businesses recover from the devastating economic impact of this disaster very seriously.
“State regulators have also risen to the challenge. Under the leadership of the New York insurance department, regulators are doing an outstanding job communicating with consumers and insurers and monitoring financial solvency under circumstances never before experienced by the industry.
“NAII urges Congress to proceed cautiously in its consideration of any proposal to implement a federal reinsurance program to cover future claims from acts of terrorism or war. While witnesses pointed out that some market dislocation has occurred in the wake of the disaster, it is still unknown how widespread this disruption will be or how long it will last.
“Creating a federal reinsurance program to cover losses from terrorism and war risks is an exceptionally complex issue that impacts every insurer, from those companies that insure large commercial risks to those that protect cars, homes and small businesses. As such, it requires careful study and deserves input from the entire industry. To date, Congress has only heard from a narrow segment of property/casualty insurers.
“NAII is conducting a careful analysis of public-private programs in other nations as well as the proposals supported by others in the U.S. insurance industry so that we can determine their impact on all types of insurers, consumers and regulators and offer input to state regulators and Congress.
“While the temptation to act immediately is great, we believe the need to act responsibly is even more important. NAII agrees with the views expressed by Alan Greenspan during the debate over an economic stimulus package. According to the Chairman of the Federal Reserve Board, “It’s far more important to be right than quick.”
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