In a letter hand delivered to all terrorism reinsurance conferees, the National Association of Mutual Insurance Companies (NAMIC) and two other industry trade associations stated the critical nature of
terrorism reinsurance and urged the conferees to complete action on this vital legislation as soon as possible.
Collectively, the member companies represented by NAMIC, the Alliance of American Insurers and the National Association of Independent Insurers write 70.3 percent of the property/casualty insurance nationwide, including personal and commercial lines, workers’ compensation and specialized coverages.
“This legislation is long overdue,” Monte Ward, NAMIC’s federal
affairs vice president, said. “We hope Congress will put an end to its differences and pass this most needed legislation without further delay. NAMIC specifically supports the individual company
trigger and the inclusion of personal lines on a voluntary basis.”
“NAMIC strongly supports a temporary federal terrorism reinsurance program providing for a true risk-sharing mechanism,” Ward continued. “NAMIC seeks a terrorism backstop, not to mitigate losses that have already occurred, but to try to protect against the risk of future terrorism. An effective and equitable federal program should avoid cross-subsidies by either type of insurance company or line of coverage and provide for a per-company retention level to permit smaller and mid-sized companies to full participate in the program.”
A federal program reportedly should encompass all commercial lines, including workers’ compensation. With respect to workers’ compensation, the program should address all risks, including war, named in the underlying coverage. Additionally NAMIC and its counterparts support the availability of coverage under the program for personal lines and group life on a voluntary basis on the same terms and conditions as provided for commercial lines.
The letter continued that inclusion of a reasonable participating company deductible is essential to the viability of the federal backstop. The vast majority of insurers are small and mid-sized companies writing under $100 million in insurance annually. Although insurers would retain a significant financial exposure to loss, the per-company deductible allows a small, or even a large, company to more accurately measure its loss potential.
The terrorism reinsurance conferees are: Sens. Christopher Dodd,
(D-Conn.), Michael Enzi, (R-Wyo.), Phil Gramm, (R-Texas), Jack Reed, (D-R.I.), Paul Sarbanes, (D-Md.), Charles Schumer, (D-N.Y.), and Richard Shelby, (R-Ala.); Reps. Ken Bentsen, (D-Texas), John Conyers, Jr., (D-Mich.), Michael Ferguson, (R-N.J.), Vito Fossella,
(R-N.Y.), Bob Goodlatte, (R-Va.), Darlene Hooley, (D-Ore.), Paul Kanjorski, (D-Pa.), Sue Kelly, (R-N.Y.), John LaFalce, (D-N.Y.), James Maloney, (D-Conn.), Bob Ney, (R-Ohio), Michael Oxley, (R-Ohio), F. James Sensenbrenner, Jr., (R-Wis.), and Christopher Shays, (R-Conn.).
The full text of the letter is available on NAMIC’s website, NAMIC Online, at http://www.namic.org/topnews/021009_5.asp
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