S&P: Without Terrorism Coverage, Big Changes Loom
Congress has yet to renew the government program that reinsures losses in the insurance industry from foreign terrorist attacks, and the possibility that this program might expire at the end of 2005 is already prompting changes in some sectors of the industry, according to a new Standard & Poor's report, "The End Of Terrorism Insurance Could Bring Big Changes in the U.S."
Congress has yet to renew the government program that reinsures losses in the insurance industry from foreign terrorist attacks, and the possibility that this program might expire at the end of 2005 is already prompting changes in some sectors of the industry, according to a new Standard & Poor's report, "The End Of Terrorism Insurance Could Bring Big Changes in the U.S."
Companies writing workers' compensation policies could prove especially vulnerable if the Terrorism Risk Insurance Act (TRIA) is not renewed because they must cover on-the-job injuries, whether or not reinsurance is available, The Insurance Journal reported.
If reinsurance becomes unavailable, these insurers will likely develop new risk models for this coverage.
Some landlords are also at risk without TRIA. With no government
reinsurance, property/casualty insurers could well drop terrorism coverage, depressing property valuations for some.
With so much at risk, an alliance real estate, insurance and other interests are making a two-year extension of TRIA, a high priority.
Related Topics:
