U.S. Eyes Group Life For Terrorism Plan

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Washington

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The U.S. Treasury Department is seeking detailed information onthe marketplace for group life insurance for its determination onwhether group life should be included in the recently enactedfederal terrorism reinsurance program.

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

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

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The request for comments, which Mr. Fisher said will bepublished shortly in the Federal Register, seeks input onwho are the buyers and sellers of group life insurance, and howthey are brought together.

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

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

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The Treasury department is asking for specifics on the type andamount of coverage available, deductibles, sublimits andrenewability.

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Treasury is also seeking input on current capacity and theavailability of alternate sources of reinsurance–such as throughcapital markets.

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In particular, the Treasury department wants empirical supportfor whether group life insurers have reasonable access to adequateand affordable catastrophe reinsurance–and, if not, why inclusionin the program would correct the situation.

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Respondents, Treasury added, should compare the magnitude andscope of the group life situation to that which confrontedproperty-casualty insurers.

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Finally, Treasury said, if it is appropriate to include grouplife under the program, the presumption is that the currentprovisions of the legislation would apply. However, if theseprovisions are not applicable, Treasury said, respondents shouldprovide a detailed explanation of the changes that would be neededto implement the program for group life.

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Comments are due to Treasury 30 days after the request ispublished 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 serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.


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