U.S. Eyes Group Life For Terrorism Plan

Washington

The U.S. Treasury Department is seeking detailed information on the marketplace for group life insurance for its determination on whether group life should be included in the recently enacted federal terrorism reinsurance program.

At a press briefing last month, Treasury Undersecretary Peter R. Fisher said that the terrorism insurance legislation requires the Treasury department to prepare, on an expedited basis, a study on the impact of terrorism risk on group life insurers and on the availability of group life coverage.

Towards that end, he said, is seeking public comments on the issue.

The request for comments, which Mr. Fisher said will be published shortly in the Federal Register, seeks input on who are the buyers and sellers of group life insurance, and how they are brought together.

The request asks how the group life market is regulated in the United States and whether there are significant differences among the states. It also seeks input on risk exposures of policyholders, including the degree of concentration both by locality and type of employer.

In addition, the request asks for details on the availability and price of group life reinsurance both before the Sept. 11 terrorist attack and after.

The Treasury department is asking for specifics on the type and amount of coverage available, deductibles, sublimits and renewability.

Treasury is also seeking input on current capacity and the availability of alternate sources of reinsurance–such as through capital markets.

In particular, the Treasury department wants empirical support for whether group life insurers have reasonable access to adequate and affordable catastrophe reinsurance–and, if not, why inclusion in the program would correct the situation.

Respondents, Treasury added, should compare the magnitude and scope of the group life situation to that which confronted property-casualty insurers.

Finally, Treasury said, if it is appropriate to include group life under the program, the presumption is that the current provisions of the legislation would apply. However, if these provisions are not applicable, Treasury said, respondents should provide a detailed explanation of the changes that would be needed to implement the program for group life.

Comments are due to Treasury 30 days after the request is published in the Federal Register.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, December 30, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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U.S. Eyes Group Life For Terrorism Plan

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