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Member, Beacon International Group, Ltd.
WASHINGTON--Two insurer groups have reiterated their opposition to requiring private insurers to offer coverage for terrorism attacks generated by nuclear, biological, chemical and radiological terrorist attacks.
"From an insurance standpoint, NBCR events are qualitatively and quantitatively different from events arising from the use of conventional terrorist weapons," said the National Assn. of Mutual Insurance Cos. and the Property Casualty Insurers Assn. of America in a letter sent this week to Senate Banking, Housing and Urban Affairs Committee Chairman Chris Dodd, D-Conn., and House Financial Services Committee Chairman Barney Frank, D-Mass.
"Indeed, even before the atrocities of Sept. 11 exposed the vulnerability of the United States to large-scale terrorist attacks on American soil, insurance companies and insurance regulators had long regarded losses caused by nuclear incidents as uninsurable," the letter states.
Congress is expected to begin consideration of extending the Terrorism Risk Insurance Extension Act, which provides a federal backstop for insurers facing losses from future catastrophic terrorism attacks, beyond its Dec. 31 expiration. How NCBR risks would be treated in an extension remains unknown.
The letter notes that there is no private reinsurance available to cover such risks. The letter calls upon Congress to create a commission to study all aspects of the NBCR exposure.