Advocates of including group life insurance as a covered line in legislation extending the Terrorism Risk Insurance Act met with little resistance in a House Financial Services Subcommittee hearing last week.
Thomas Watjen, president and CEO of Unum Group, appeared before the committee on behalf of the American Council of Life Insurers. In his testimony, he noted that group life is a valuable benefit for employers and employees alike.
“Group life insurance is a critical employee benefit,” Watjen said. “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.”
However, he added that because group life is offered through employers, group life insurers would be especially hard hit in the event of a major terrorist attack.
“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, Watjen argued that group life should also operate under a recoupment mechanism that is separate from other lines. “Recoupment of amounts paid by the Treasury for losses relating to property and casualty insurance should only be made by property and casualty insurers,” he said. “Similarly, recoupment for losses relating to group life insurance should only be made by group life insurers.”