The U.S. Department of the Treasury today announced the appointment of nine people to serve as members of the Advisory Committee on Risk-Sharing Mechanisms (ACRSM) to spur the private market for terrorism insurance.
The ACRSM, authorized by the Terrorism Risk Insurance Program Reauthorization Act of 2015, is supposed to offer advice and recommendations to the Treasury’s Federal Insurance Office (FIO) on ways to develop non-governmental, private market risk-sharing mechanisms for protection against losses arising from acts of terrorism.
The committee members include representatives from property insurers, reinsurers and brokers.
On April 20, 2015, Treasury published a notice in the Federal Register seeking applicants for the ACRSM. Members serve on the committee for terms of up to two years.
The nine individuals appointed to serve as members of the ACRSM include:
- Wendy Peters, Executive Vice President Terrorism Practice Group, Willis North America
- John Seo, Co-Founder and Managing Principal, Fermat Capital Management LLC
- Jonathan Clark, Property Treaty Reinsurance Broker, Guy Carpenter & Co. LLC
- Sean McGovern, Chief Risk Officer, Lloyd’s of London
- William Donnell, President U.S. P&C, Swiss Re
- Erik Nikodem, Property Executive, AIG
- Gregory Hendrick, Chief Executive of Reinsurance Operations, XL Catlin
- Kean Driscoll, Chief Executive Officer, Validus Reinsurance, Limited
- Michael Sapnar, President and Chief Executive Officer, Transatlantic Holdings, Inc
“These nine individuals have a broad cross-section of insurance experience and expertise and bring a diverse set of perspectives to the ACRSM,” said Michael McRaith, director of the FIO.
There has been an ongoing debate about the necessity of the federal government’s terrorism reinsurance program. Some in the insurance, real estate and banking industries argue it is necessary while conservative think tanks like the Cato Institute and the Heritage Foundation and some consumer and taxpayer groups argue that the federal terrorism reinsurance program itself inhibits the expansion of the private insurance market.
According to a report by the President’s Working Group on Financial Markets (PWG) last April 2014, private market per-risk capacity for terrorism risk insurance coverage has increased only moderately since 2010.
Congress renewed the federal terrorism program for six years as of January of this year but did raise the trigger amount needed in total losses before the government program kicks in.
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