Insurers are fully meeting their promises to policyholders in the wake of the Sept. 11 terrorist attack on the World Trade Center; however, a federal backstop is needed to provide protection against future terrorist attacks, according to testimony by the American Insurance Association (AIA) before the New York State Assembly’s Insurance Committee.
“Although the property/casualty insurance industry can deal with the incredible losses from September 11, we are very concerned about what will happen if there are additional, large-scale terrorist attacks in the future. It is critical that everyone recognize that we are dealing with a peril which is not quantifiable, and therefore not insurable within the finite resources of the private insurance industry,” said James Harrington, AIA vice president, northeast region.
“We believe that the only course of action is immediate enactment of legislation to create a federal financial backstop for losses that result from future terrorist attacks,” added Harrington. AIA is proud of the response of its member companies to this attack.” Harrington told the committee that insurers responded immediately working with state and federal authorities to respond to the disaster.
With respect to insured losses, the Sept. 11 attack is the largest man-made or natural disaster in history. Estimates of total insured losses range from $30 billion to $60 billion, although the final amount will not be known for years and could be higher. Despite the enormity of the loss, insurers are paying claims fully and quickly, according to AIA.
Was this article valuable?
Here are more articles you may enjoy.