Brokers: New Treasury Premium Regs Are A Help

|

By Steven Brostoff, Washington Editor

|

NU Online News Service, April 22, 10:50 a.m. EDT,Washington?The Council of Insurance Agents and Brokers ispraising the latest Treasury Department interim regulations of theterrorism insurance program for clarifying the characterization of"premiums."

|

"Specifically, the Treasury has responded positively to theCouncil's request for clarification that premiums collected forterrorism coverage under the federal backstop program are indeed?premiums' and not ?surcharges' (subject to brokerintermediation)," said Ken A. Crerar, president of theWashington-based Council.

|

He said that within weeks of the enactment of the terrorisminsurance legislation, the Council received anecdotal reports thatsome insurers were characterizing the premiums inappropriately andasked Treasury for guidance on the issue.

|

Mr. Crerar said that the problem appears to have largelydisappeared in the past two months, and the new Treasury guidancenow assures that brokers will not be disadvantaged by theprogram.

|

According to a legal analysis produced by the Council, theinterim regulations addressed three other issues of interest tobrokers.

|

First, the regulations clarify that coverage can include limitsthat are permissible under state law. Thus, exclusions for nuclear,biological or chemical events that are permitted by state law arealso permitted for the terrorism component.

|

Second, the regulations clarify that required disclosures mustbe made at the time of offer, purchase and renewal of a policy.

|

Third, the regulations note that Treasury is still consideringwhether the mandatory offer requirements should be extended to Dec.31, 2005.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.