Seven House members recently called for an examination of some issues surrounding terrorism risk insurance.

According to the Independent Insurance Agents & Brokers of America, in a letter to Treasury Secretary John Snow, the House representatives asked that the forthcoming Presidential Working Group on Financial Markets (PWG) report evaluate key terrorism issues such as: lack of a viable reinsurance market; difficulty in calculating the risk; hindrance to a free-market response; increasing take-up rates and decreasing government exposure; and nuclear, biological, chemical, and radiological (NBCR) risk.

Additional items mentioned in the representatives' letter were that only a limited amount of private-sector terrorism reinsurance is available and that the current marketplace for terrorism insurance is imperfect. They posed questions as well, like whether the Treasury Department and other PWG members believe that adequate reinsurance and primary insurance exists now or will exist by the time the Terrorism Risk Insurance Extension Act expires Dec. 31, 2007, and how NBCR terrorist losses would affect the way insurers, reinsurers, and other sources of private capital view and underwrite conventional terrorism risk.

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