Seven House members recently called for an examination of someissues surrounding terrorism risk insurance.

According to the Independent Insurance Agents & Brokers ofAmerica, in a letter to Treasury Secretary John Snow, the Houserepresentatives asked that the forthcoming Presidential WorkingGroup on Financial Markets (PWG) report evaluate key terrorismissues such as: lack of a viable reinsurance market; difficulty incalculating the risk; hindrance to a free-market response;increasing take-up rates and decreasing government exposure; andnuclear, biological, chemical, and radiological (NBCR) risk.

Additional items mentioned in the representatives' letter werethat only a limited amount of private-sector terrorism reinsuranceis available and that the current marketplace for terrorisminsurance is imperfect. They posed questions as well, like whetherthe Treasury Department and other PWG members believe that adequatereinsurance and primary insurance exists now or will exist by thetime the Terrorism Risk Insurance Extension Act expires Dec. 31,2007, and how NBCR terrorist losses would affect the way insurers,reinsurers, and other sources of private capital view andunderwrite conventional terrorism risk.

IIABA supports the House representatives' action. “It isvirtually impossible to assess when or where an attack may come,and how much damage it will cause, and this makes it extremelydifficult for the insurance marketplace to adequately providecoverage for such an event,” said Charles E. Symington Jr., IIABAsenior vice president for government affairs and federalrelations.