NU Online News Service, July 22, 10:15 a.m. – The American Academy of Actuaries, Washington, is now studying the effects of terrorism on major medical insurance, group life insurance, group disability insurance and group long-term care insurance.
The AAA’s terrorism/extreme events working group is assessing the threat that insurers, reinsurers, private employers, government agencies and the entire U.S. economy face from events such as biological attacks, attacks on the water supply and the detonation of radioactive bombs, according to Jan Carstens, chair of the AAA’s terrorism/extreme events working group.
Carstens, a consulting actuary with Milliman USA, Minneapolis, says the working group is addressing issues such as the availability and cost of reinsurance for group insurance policies, and possible solutions, such as risk pools, purchasing cooperatives, and aggregate stop loss coverage arrangements that would reimburse carriers for losses above a certain dollar amount.
AAA leaders have not yet decided whether the working group will analyze the effects a major terrorist event could have on Commissioners Standard Ordinary Tables, Carstens says.
But Carstens says the medical insurance review will include analysis of the effects of a major attack on service utilization, prescription drug costs, mental health benefits costs and overall claims costs.