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April 25, 2007 at 10:19 AM
Advocates of including group life insurance in legislation extending the federal Terrorism Risk Insurance Act met with little resistance in a House Financial Services Subcommittee on Tuesday.
Thomas Watjen, president and chief executive officer of Unum Group Inc., Chattanooga, Tenn., told subcommittee members that group life is a valuable benefit for employers and employees alike.
“Group life insurance is a critical employee benefit,” Watjen said, appearing on behalf of the American Council of Life Insurers. “For millions of Americans, especially low-income workers, it is the only life insurance that their families have and can rely on if they were to unexpectedly die.”
Because group life is offered through employers, group life insurers would be especially hard hit in the event of a major terrorist attack, he said.
“Unlike individual life policies, where the insured individuals are generally scattered throughout a particular area or region, group life policies usually have very high concentration risks,” he said.
If it is included under a TRIA extension, group life should also operate under a separate recoupment mechanism than other lines, Watjen argued.
Members of the subcommittee, including its chairman, Rep. Paul Kanjorski, D-Penn., endorsed its inclusion of group life in TRIA, as has Barney Frank, D-Mass., Financial Services Committee chairman, in comments made earlier this year.
One obstacle for group life advocates in recent years is that government studies found that while group life reinsurance has been generally unavailable, primary carriers have been willing to offer coverage at relatively affordable rates.
