NAII: TRIA Helps, But More Is Needed

Don Griffin, assistant vice president, business and personal lines, for the NAII in Des Plains, Ill., said while the law has had an impact in that area, "it depends upon the pricing they're actually getting for the product as to whether they're going to buy it or not. It's effective as far as those companies that feel they need to have the terrorism coverage and can afford the premium and are actually purchasing it."

Mr. Griffin continued that the coverage has been cumbersome for companies as well as policyholders. He noted that exclusions were rendered null and void when the bill was signed. Also, the disclosure notice forms insurers have had to provide and complicated coverage issues add to their burden.

"Certainly I think it's doing what it was designed to do, to provide a federal reinsurance backstop for terrorism coverage," he said. "And I must compliment Treasury; they're working diligently to try and issue regulations on all of this."

He added that Treasury has been fairly responsive to industry concerns with the wording of the regulations. "They try to make it so that companies can use their normal business practices to comply with the law," he said.

Ms. Pusey praised President George W. Bush and his administration for working with the broad insurance community to oversee the terrorism insurance program.

"The Treasury Department has forged a solid working relationship with insurers, state insurance regulators and terrorism insurance consumers, and this bodes well as the federal government continues to implement the program," she said.

But while the law has helped, she also noted that it alone has not solved all the problems inherent with getting insurance in a post-September 11 world.

"The continuing uncertainty of the terrorism threat makes it extremely difficult to underwrite and price insurance for this risk," Ms. Pusey said. "This ongoing uncertainty is fundamentally at odds with the predictability that is needed to provide terrorism insurance, absent the federal backstop"

AIA will work closely with the Bush Administration and the rest of the business community during the coming year as more is learned about the effects of the law, Ms. Pusey said.