Push On To Have Group Life Qualify Under Terrorism Insurance Bill
A growing faction within the life insurance industry is making a last ditch effort to include group life insurance among the lines of coverage that would qualify for federal assistance for losses caused by terrorism, the National Underwriter has learned.
Several sources, mainly on the property-casualty side of the business, say several life insurers have been pressing their case on Capitol Hill that group life should be covered under any federal terrorism reinsurance bill on the same basis as workers compensation.
“They see themselves as having the same problem as we have with workers comp,” says one p-c lobbyist, who asked not to be identified.
That is, he says, the possibility of substantial losses if a terrorist attack causes the deaths of perhaps thousands of people at one location covered by one group life policy.
Moreover, this lobbyist says, many life insurers insist they have been unable to secure adequate reinsurance for policies at certain “high risk” locations, such as nuclear power plants.
But several of the p-c lobbyists contacted by NU say there is a split within the life insurance industry.
Some large life insurers, they say, have been able to put together private reinsurance programs for their group life businesses.
For competitive reasons, these lobbyists say, the life insurers with private reinsurance programs have not been supporting the effort to include group life in the terrorism insurance bills.
Currently, both bills (H.R. 3210, the House version, and S. 2600, the Senate version) mandate a federal government study on the impact of another major terrorist attack on the life insurance industry.
Jack Dolan, a spokesman for the American Council of Life Insurers, Washington, notes that life insurers have long supported the study.
“ACLI supports a federal study to determine what role, if any, the federal government should play in the event of a catastrophe causing deaths at such great levels as to challenge the industrys claims paying ability,” Dolan says.
However, he adds, “ACLI is assisting individual companies efforts for a federal backstop for group life insurance.”
P-c lobbyists are split on the politics of the effort. One lobbyist says he is pleased life insurers are trying to include group life in the legislation.
Their effort, he says, broadens the coalition in favor of the legislation and helps buttress the case made by p-c companies of widespread gaps in the terrorism reinsurance market.
But another p-c lobbyist says he is unhappy group life insurers are getting involved. He says members of Congress, particularly in the Senate, are trying to scale back as much as possible any federal assistance to the insurance industry.