WASHINGTON–Any long-term solution to the problem of insuringterrorism risk will require some degree of federal governmentinvolvement, according to the American Insurance Association.
In response to Congressional requests regarding insurers' needsto properly manage terrorism risk, the AIA has drafted a conceptpaper calling for a permanent structure similar to the currentTerrorism Risk Insurance Act. It also calls for special federalbacking for losses due to chemical, biological, nuclear orradiological attacks.
“Because potential insured losses vastly exceed the amount ofpotential private sector capital, a public policy solution is stillcritically needed upon the expiration of the current TRIA extensionlegislation,” the group said in the paper.
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