The top property-casualty panel at the National Association of Insurance Commissioners says the federal terrorism reinsurance program should protect group life insurers.[@@]
The Property and Casualty Insurance (C) Committee of the NAIC, Kansas City, Mo., approved a terrorism reinsurance expansion resolution here at the NAIC’s summer meeting.
“Group life insurance faces the same concentration of risk as workers’ compensation insurance and provides protection for the lives of American workers,” according to the text of the resolution.
Supporters of the resolution now are seeking the support of the NAIC plenary, a body that includes all voting members of the NAIC.
Congress is preparing to debate renewal of the Terrorism Risk Insurance Act, which was passed after the Sept. 11, 2001, terrorism attacks in an effort to protect insurers against worries about huge, unpredictable terrorism-related losses. The current act protects property-casualty insurers but leaves out sellers of group life insurance and other life, health and annuity products.
Trade groups supporting the addition of group life to the terrorism reinsurance program include the American Council of Life Insurers, Washington; the American Insurance Association, Washington; the Property Casualty Insurers Association of America, Des Plaines, Ill.; and the Reinsurance Association of America, Washington.
Group life is particularly vulnerable to terrorism, according to Edwin Harper, an insurance executive who spoke at the property-casualty committee session.
Harper is a senior vice president at Assurant Inc., New York, a company with a large benefits unit that has lobbied hard for inclusion of group life in the terrorism reinsurance program.
Harper reported that Assurant once could get $900 million in reinsurance for a reasonable premium. Today, he said, the company pays 10 times as much for just $40 million in reinsurance.
Harper said many carriers sell group dental, group disability and other group benefits products together with group life insurance.
If benefits carriers get out of the group life market, “basically, it means closing up shop, probably forever,” Harper said.