N.Y. To Act On Terrorism Insurance

By Mark E. Ruquet

NU Online News Service, Oct. 25, 3:28 p.m. EST, NewYork?New York State's top insurance regulator said lastnight that if Congress doesn't take action to make terrorisminsurance available, he will.

"It is hard [for a state] to find a global solution to a globalproblem, but we are going to try," commented Gregory V. Serio, NewYork insurance superintendent.

Mr. Serio said that the state, in looking for answers to theterrorism insurance situation, would review the laws related tocaptive insurers and other alternative financing mechanisms thatcan be expanded to small and medium size commercial accounts.

Mr. Serio said the state can no longer wait for Congress' answerto the problem, and that he is appointing a commission in the nexttwo weeks to deal with the problem.

His remarks came during a reception held by the InsuranceBrokers of the State of New York.

From New York's perspective, Mr. Serio said, there is a seriousreinsurance capacity problem in the marketplace that needs to besolved.

He said the commission would work up a plan to help theinsurance industry come up solutions related to the capacity issuesstemming from the need for terrorism coverage.

A vote on a federal backstop plan to provide terrorisminsurance, if it occurs, is expected in a lame duck session afterthe Nov. 5 elections, which have the potential to create a shift inpower in the Senate where the Democrats hold a one votemajority.

Mr. Serio said it was "very upsetting" that a measure had notbeen approved, adding, "I fear that after the election, the votewill not get done."

A federal solution would be more helpful, Mr. Serio added,because this issue affects the global economy, in which New York isa principal participant.

Mr. Serio said he fears all of the work done by the industry towin passage of a terrorism backstop bill will go for naught becauseCongress will not vote on the bill.

He praised the work done by members of the insurance communityto help his department educate legislators in Washington, D.C. onthe need for terrorism insurance backstop legislation.

Mr. Serio said he believes the hard market will remain for sometime to come, and promised that his department would do all it canto respond to the needs of the market.

"At no time in this market has there been more of a need forcreativity," Mr. Serio observed, adding that the department will beworking with the state's agents and brokers to come up withcreative solutions to filling the market's insurance needs.