But Harper also notes that regulators have expressed concern that it would be the wrong time for the bereaved family of an insured to learn that a claim on a group life policy was not being paid because of a terrorism exclusion.
Indeed, Georgia Commissioner John Oxendine says that a carrier would have to “jump through a lot of hurdles before I would approve one.” Oxendine says it is not in the interest of good public policy to allow such exclusions. To date, he says his department has not received any such applications.
Oxendine says it is important for Congress to address terrorism coverage because failure to do so could result in a big bill for taxpayers should another event occur. “You’re gambling. If there is not another terrorism event, then everything is fine.” But if there is another event and the population insists on help, then it would be more costly “to crank up the printing press” than to handle the issue right now, he adds.
Any applications for terrorism exclusions should be reviewed on a case-by-case basis, says Michael Lovendusky, senior counsel with the American Council of Life Insurers, Washington.
Consumer advocates have questioned why private solutions such as risk pools or securitizations are not being advocated.
Reproduced from National Underwriter Life & Health/Financial Services Edition, March 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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