Insurers welcomed the enactment of the Terrorism Risk Insurance Act of 2002 (TRIA), which mandates coverage of damages caused by terrorist attacks but provides a Federal government "backstop" to limit commercial insurers' losses.
TRIA is an important step in the industry's attempt to deal with terrorism risk, according to Peter Bisbecos, legislative and regulatory counsel, National Association of Mutual Insurance Companies (NAMIC, Indianapolis). "This allows everyone to stop and take a breath, and continue to assess those risks and how we might address them, with the assurance that you will only lose so much and no more," he says.
From an operations standpoint, insurers face a compliance challenge to notify insureds of changes in premium to manage the part of terrorism losses not covered by the government, and some insurers that straddle the personal/commercial divide remain in doubt as to whether they are required to comply. "Treasury has shown a tremendous amount of concern for these issues, but you still have people who don't know whether they're covered by the Act, and that's causing some angst," Bisbecos says.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio