Treasury To Survey Terrorism Coverage
By Daniel Hays
NU Online News Service, Sept. 17, 3:44 p.m. EDT?The U.S. Treasury Department is preparing a comprehensive survey to gauge the ability of insurance industry to provide terrorism insurance once the Terrorism Risk Insurance Act expires, an official said.
Mario L. Ugoletti, deputy director for Treasury's Office of Financial Institutions Policy, gave details of the research in an appearance at the National Association of Insurance Commissioner's fall meeting, which concluded yesterday.
Mr. Ugoletti told the NAIC's Terrorism Insurance Implementation Working Group that the survey form, which will go to insurers, reinsurers and policyholders is currently undergoing field testing. The government contractor for the study is Westat of Rockville, Md.
Full survey research into terrorism insurance market conditions is expected to begin later this fall. It will seek information from insurers concerning how many policies have been sold that include coverage under the TRIA, overall premium information, premium information concerning TRIA coverage and types of reinsurance in place and pricing techniques.
Mr. Ugoletti said that "great care" would be taken to ensure the confidentiality of the survey and to remove any material that would identify respondents. He said that insurers contacted for the survey would be selected on a random basis.
Asked if participation in the survey was compulsory, Mr. Ugoletti said that officials were hoping that the bully pulpit of their official clout would be enough to encourage insurers to cooperate and spend the two hours necessary to complete the survey.
He said the information might possibly be obtained by requiring companies to provide premium information to the NAIC.
"We look forward to continuing work with the NAIC," Mr. Ugoletti said.
Iowa Insurance Commissioner Terry Vaughan, who heads the NAIC Terrorism Insurance Implementation Working Group that Mr. Ugoletti addressed, told him the group is "anxious to assist in your report to Congress.
Speaking from the audience, Jeffrey Klein, government affairs representative for Royal & SunAlliance said that discussions are underway concerning the creation of an industry pool to provide workers' compensation terrorism coverage, which has been difficult to obtain for some operations with large aggregations of employees or concentrations of business in areas viewed as potential terror targets.
Mr. Ugoletti as part of his talk said he wanted to clarify the exact expiration of the TRIA, which is Dec. 31, 2005. A decision on whether to extend TRIA is due Sept. 1, 2004. Claims for terror acts committed prior to Dec. 31, 2005 can continue to be submitted beyond that date, but Treasury has the discretion to declare when claims associated with a terrorism act are final.
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