NAII Blasts Neb. Terrorism Exclusion Rejection
NU Online News Service, Feb. 27, 11:55 a.m. EST?A trade group's attorney is predicting that a Nebraska Insurance Department decision to reject terrorism exclusions in personal lines could imperil the financial state of some insurers.
Due to a lack of reinsurance, "this action by the [Nebraska insurance] commissioner could adversely impact the ability of some insurance companies to offer coverage. Blanket disapproval of all exclusions may jeopardize an individual insurer's financial condition," warned Ann Weber, counsel with the Des Plaines, Ill.-based National Association of Independent Insurers.
Ms. Weber was reacting to a Nebraska insurance department decision that denied exclusion of terrorism risks, including nuclear and bio-terrorism.
"We believe that it is only a relatively remote possibility that personal lines losses related to terrorism will have an insurer-endangering impact. There is a considerable spread of risk inherent in personal lines, especially in a state like Nebraska," said Insurance Commissioner L. Tim Wagner, in his notice of his intention to disapprove personal lines terrorism exclusions.
"We are skeptical that there is much coverage under existing contracts for so-called nuclear and bio-terrorism," he added. "We believe that it would be bad public policy to have significant insurer-to-insurer differences in the coverage for the remote chance that a personal lines policyholder in Nebraska may suffer otherwise covered losses arising out of a terrorist act."
NAII said that the National Association of Insurance Commissioners rejected a request last month by NAII that insurers be allowed to include terrorism exclusions in auto and homeowners insurance policies. NAIC previously approved such exclusions in commercial insurance policies, NAII noted.
NAII counts a membership of more than 690 property-casualty insurance companies writing more than $98 billion in annual premium.
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