In response to questions posed by the president's working group on financial markets, the American Academy of Actuaries submitted its Terrorism Risk Insurance Analysis, which underscored the necessity for a national agenda for terrorism risk.
Michael McCarter, chairperson of the Terrorism Risk Insurance Act Subgroup, said that a large chemical, nuclear, biological, or radiological terrorist attack on New York City could cause insured losses of $778 billion. He also said that insurers would be exposed to losses well beyond their means without a national plan to manage terrorism risk.
The academy was not able to identify an insurance, reinsurance, or capital market solution that could finance such potential insured losses from a large event.
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