Insurers Respond To Oxley Challenge

"Chairman Oxley has clearly expressed his desire to see the insurance component of the terrorist attack handled efficiently and with compassion," said Maria Berthoud, vice president of federal affairs for the Alexandria, Va.-based Independent Insurance Agents of America. "I believe the industry stands ready to do what Rep. Oxley is requesting."

Barbara Levering, a representative for the Washington-based American Insurance Association, called Rep. Oxleys letter "positive and constructive."

"It recognizes the dialogue we have had with members and staff on Capitol Hill assuring them that AIA members are moving forward on paying claims and are financially able to meet their obligations," she said.

The Indianapolis-based National Association of Mutual Insurance Companies said in a statement that NAMIC appreciates the committees interest in the well-being of the insurance industry.

"NAMIC is confident that its members will honor their contracts and will proceed to adjust and pay claims in a responsible manner just as they have done when other disasters have struck this country," NAMIC said.

David Farmer, senior vice president of federal affairs for the Alliance of American Insurers in Downers Grove, Ill., said that insurance companies are focused on organizing themselves in appropriate ways to meet their obligations to their policyholders. "We are cooperating with all national and state officials in dealing with this terrible national tragedy," he said.

Carl Parks, senior vice president of government relations for the Des Plaines, Ill.-based National Association of Independent Insurers, said NAII agrees with Rep. Oxley that the ability and willingness of the insurance industry to fulfill its obligations is critical.

"NAII takes this responsibility very seriously and we and our member companies are currently making all efforts to help heal the financial wounds caused by these attacks," Mr. Parks said.

In his letter, Rep. Oxley noted that numerous insurers have already stepped forward and pledged their full cooperation and commitment to honoring their contracts. However, he said, there has been some concern that companies might deny coverage based on the "acts of war" exclusion.

"Any attempt to evade coverage obligations by either primary insurers or reinsurers based on such legal maneuvering would not only be unsupportable and unpatriotic, it would tear at the faith of the American people in the insurance industry," Rep. Oxley said.

He noted that America is voicing its outrage at the terrorist attack using words of war. "But this rhetoric reflects the passion and determination of our country, not the legal reality of Tuesdays destruction," he said. "We do not believe that any just interpretation of [Sept. 11's]tragic events would permit an insurer or reinsurer to invoke an act of war exclusion to escape its obligations to the victims," Rep. Oxley said.

He asked the NAIC for assistance in confirming that all insurers, domestic and foreign, will honor their commitment. Rep. Oxley also asked the NAIC to keep the committee informed regarding the financial health of insurance companies paying the claims.

In addition to Rep. Oxley, the letter was signed by Reps. John J. LaFalce, D-N.Y., Richard H. Baker, R-La., and Paul Kanjorski, D-Pa.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 21, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

Contact Webmaster