The success of the newly enacted federal Terrorism Risk Insurance Act hinges on how smoothly the implementation process will be for insurers faced with a number of compliance issues.
Enactment of the new legislation imposes many new requirements upon insurers. The U.S. Treasury Department, National Association of Insurance Commissioners (NAIC) and individual states are working to develop an effective implementation strategy that clarifies the laws for consumers, insurers and regulators.
To aid in the transition process, the National Association of Independent Insurers (NAII) and the Alliance of American Insurers (Alliance) held an informational meeting Dec. 12 that attracted more than 250 participants from member companies of both associations to discuss compliance issues.
“It is obvious from the number of participants in the meeting that insurers are very interested in effective and efficient implementation of the Terrorism Risk Insurance Act,” Donald Griffin assistant vice president of business and personal lines for NAII, said. “We are encouraged by the swift actions being taken by Treasury, the NAIC and state insurance departments to respond to the questions and implementation issues that have developed.”
“While the NAIC has made admirable progress in developing a model for insurers to follow, companies continue to face many questions,” Greg Heidrich, senior vice president, secretary and treasurer of the Alliance, commented. “In addition, there is a need for strong coordination among all the states in their approach to this important legislation. This meeting shows our commitment to working with all the state regulators and the Treasury Department to ensure a smooth, and hopefully, uniform implementation.”
The Treasury Department recently offered interim guidance for the industry on how to begin implementing the notice and disclosure elements of the act. The NAIC also has issued a model bulletin that may help create uniformity among the states regarding implementation issues.
The meeting featured a presentation by Dale Miller and Mike Trier of Lord, Bissell and Brook regarding the mandates, administration and other issues related to implementing the act. Domenick Yezzi Jr. of the Insurance Services Office (ISO) provided an explanation of the ISO commercial forms filed and upcoming rate filings. Mona Carter of NCCI presented an overview of the NCCI’s activities in the areas of terrorism premium charges for voluntary and assigned risk business, the NAIC disclosure notices, changes to the workers compensation policy, statistical reporting and residual market special requirements.
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