More On Legal & Compliancefrom The Advisor's Professional Library
- Scope of the Fiduciary Duty Owed by Investment Advisors A fiduciary obligation goes beyond the suitability standard typically owed by registered representatives of broker-dealer firms to clients. The relationship is built on the premise that the advisor will always do the right thing for the person or entity receiving advice.
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
The House Financial Services Committee passed on August 3 the Terrorism Risk Insurance Revision and Extension Act of 2007 (H.R. 2761), which will extend the Terrorism Risk Insurance Act (TRIA) by 15 years and may help spur the further development of a private market for terrorism risk insurance.
After the attacks of 9/11, many insurance companies excluded terrorism events from their insurance policies. As a result, Congress passed TRIA in 2002 as a temporary three-year program, which created federal protection from against terrorism related losses. In 2005, the measure was extended to 2007, and will expire at the end of this year if no action is taken.
According to a House release announcing the extension of TRIA, while TRIA has kept terrorism insurance affordable, the most recent report by the President's Working Group on Financial Markets found that a private market for terrorism reinsurance in virtually nonexistent--especially with regard to nuclear, biological, chemical, and radiological acts.
Besides extending the Act for 15 years, H.R. 2761 would also change TRIA's definition to include domestic terrorism; set the program trigger at $50 million; add group life insurance to the lines of insurance for which terrorism coverage must be available; and decrease deductibles for terrorist attacks of more than $1 billion and decrease the trigger after such events.