National Association of Mutual Insurance Companies Issues Public Comments to Treasury Department – ​​InsuranceNewsNet

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WASHINGTON, May 16 — The National Association of Mutual Insurance Companies, Indianapolis, Indianamade a public comment to US Department of Treasury. The comment was written on May 11, 2022and posted on May 12, 2022:

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TO: Richard IfftSenior Insurance Regulatory Policy Analyst, Federal Insurance Office, Salle 1410 tons, Treasury Department, 1500 Pennsylvania Avenue NW, washington d.c. 20220

SUBJECT: 2022 Terrorism Risk Insurance Program Effectiveness Report, Document Number: 2022-06681

Dear Mr Ifft,

On March 30, 2022the Treasury Department published in the Federal Register a request for comments on the 2022 report on the effectiveness of the insurance program against terrorism risks. The National Association of Mutual Insurance Companies (NAMIC) appreciates the opportunity to comment on the effectiveness of the Terrorism Risk Insurance Program (TRIP) which was established by the Terrorism Risk Insurance Act (TRIA).

NAMIC is the largest property and casualty insurance business group with a diverse membership of more than 1,500 local, regional and national member companies, including seven of the top 10 property and casualty insurers in United States. NAMIC members lead the personal insurance industry, accounting for 55% of the auto market. Through our advocacy programs, we promote public policy solutions that benefit NAMIC member companies and the policyholders they serve and foster greater understanding and recognition of the unique alignment of interests between management and policyholders of mutual companies.

Terrorism is a permanent threat to the population of United States and an orderly economic recovery and reconstruction effort after any major terrorist attack is essential. To encourage private sector participation in the terrorism insurance market – and thereby protect and promote our country’s finances, security and economic strength – the WE the government needs a long-term and effective terrorism insurance loss management plan.

NAMIC supports TRIP as a model of risk sharing between insurers, policyholders and the federal government which – in addition to providing an immediate short-term stabilizing effect after a terrorist attack – acted to create space for a market robust private for terrorism insurance to form where it would not otherwise. NAMIC supports a long-term private/public terrorism insurance program because terrorism is fundamentally an uninsurable risk due to the inability of insurers to predict when events will occur and due to the potentially catastrophic costs of an attack. Indeed, in the absence of the federal program’s safety net, such losses would exceed the capacity of insurers as well as the affordability of policyholders.

As the risk and exposure to terrorism is not expected to decrease, as it will continue to expose the public for an indefinite period, NAMIC has supported many long-term reauthorizations of the TRIA program. More recently, the TRIA program was enacted on December 20, 2019extending the program through December 31, 2027. In order to maintain a healthy private market for terrorism insurance at fair and affordable prices, it is necessary to have broad and broad participation of insurance companies in the WE and elsewhere, providing cover for terrorism. Therefore, NAMIC continues to support the current program.

Looking at some of the questions posed in the Request for Comments, NAMIC shares several high-level remarks. NAMIC does not believe that there are lines of insurance or coverages within certain lines of insurance currently subject to the program that no longer require TRIP’s support to ensure the availability and affordability of insurance against the risk of terrorism. Similarly, NAMIC does not currently see lines of insurance or coverages in certain lines of insurance currently not subject to the program that should be included in TRIP to promote the availability and affordability of risk insurance. of terrorism. Further, NAMIC is not aware of any significant changes in the insurance market associated with the impact of the COVID-19 pandemic that would have also affected the terrorism risk insurance market. Finally, regarding questions on the cyber insurance market, the National Association of Insurance Commissioners (NAIC) issued a October 2021 report on this market.

Thank you for giving me the opportunity to comment on this essential program to protect the ability of WE – its economy and the people and places behind that economy – to be more resilient to terrorist attacks. NAMIC encourages FIO to engage in discussions with insurers on practical elements of the TRIA, such as data collection and other issues. Please do not hesitate to contact me if I can be of assistance or provide additional information.

Sincerely,

Thomas J. Karol

General Counsel – Federal

National Association of Mutual Insurance Companies

TARGETED NEWS SERVICE (founded in 2004) provides nonpartisan news and information on “edited journalism” for news organizations, public policy groups and individuals; as well as “collected” public policy information, including press releases, reports, speeches. For more information, contact MYRON STRIPPEDeditor, [email protected], Springfield, Virginia; 703/304-1897; https://targetednews.com

Kristan F. Talley