NU Exclusive: GAO Studies Terror Re Market

By Steven Brostoff, Washington Editor

NU Online News Service, Jan. 3, 10:24 a.m. EST, Washington?The U.S. General Accounting Office is conducting a study of the terrorism reinsurance market, the National Underwriter has learned.

Industry sources said they have been contacted by the Chicago office of GAO, which is seeking information on the impact of the absence of terrorism reinsurance coverage in preparation for a House Financial Services Committee hearing, which is expected to take place shortly after Congress reconvenes on Jan. 23.

The study was reportedly requested by the Financial Services Committee.

The GAO study comes in the wake of the failure of the U.S. Senate to pass legislation creating a federal backup mechanism for the terrorism reinsurance market prior to Jan. 1, 2002, renewals.

Sources said that the industry groups already contacted by GAO include the American Insurance Association, the Reinsurance Association of America, and the Council of Insurance Agents and Brokers, all based in Washington, as well as the Insurance Services Office, Inc. in Jersey City, N.J.

GAO, sources said, is seeking any studies or analyses the industry might have done on the state of the terrorism reinsurance market following the Sept. 11 terrorist attacks. In addition, GAO is asking for any anecdotal information on efforts to obtain terrorism reinsurance coverage, sources said.

GAO is said to be requesting that the information be provided by Jan. 15.

The National Underwriter contacted the House Financial Services Committee for more details on the Committee’s request, but was unable to obtain an immediate response.