Group life insurers may have to accept not having a separate pool
By Arthur D. Postal and Matt Brady
Momentum continues to grow in Congress for passage this year of legislation extending for two years the Terrorism Risk Insurance Act, including a provision incorporating group life under the federal reinsurance umbrella.
What Your Peers Are Reading
However, the group life industry lobbied hard but unsuccessfully last week to include in the legislation a provision providing a separate pool for group life.
As a result, the industry has decided to accept the provision for a “clean bill” as privately agreed upon by Senate and House staffers, but industry representatives said they will work next year to win a technical change in the legislation providing a separate pool for the group life industry.
“Our main goal is to get group life insurance included in TRIA,” said Jack Dolan, a spokesman for the American Council of Life Insurers, which is working on the issue. “However, we recognize that time is running out in this Congress and we may have to wait until the next Congress before ironing out the details on how the program will work for group life and property/casualty.”
Dolan said, “We think there should be separate pools; we are making the case for that right now, certainly hoping that it can be addressed in this Congress, but if not, we will seek to have the issue revisited next year.
“Having a co-mingled pool just doesnt seem like the best idea if there is another catastrophe,” Dolan said.
The desire of Congress and the White House for a so-called “clean bill” with no separate pool for group life will raise the amount of loss that the companies must pay before federal help kicks in, industry officials in Washington said.
Group life industry officials were so concerned that the heads of group life units interrupted their schedules to “fly in” to Washington, D.C., last week to seek support for a separate pool for group life companies from members of Congress and the White House.