The Treasury Department is about to publish new Terrorism Risk Insurance Program regulations in the Federal Register.
The program protects insurers against big terrorist attacks.
I’m not really sure whether the government should have a special program to protect insurers specifically against terrorism, as opposed to earthquakes, hurricanes and other disasters. Maybe a disaster is a disaster.
Regardless, one of the provisions in Terrorism Risk Insurance Act that has always annoyed me is still there, and is noted in the new regulations: The terrorism program specifically excludes coverage for group life insurance and group health insurance.
Of course, in the real world, the reason act contains that exclusion is that a disaster has to kill many tens of thousands of people before it will have much of an effect on typical U.S. life insurers. Life insurers are solid companies, and they already pay millions of claims per year.
If a terrorist incident really killed tens of thousands of Americans, Congress would probably step up and help the victims.
But it’s awful to look in the law and regulations and see that the documents don’t even hint about that.
Everyday on my way to work, I walk through the strange, heavily guarded shopping mall built in the subway station under the New York World Trade Center site. As the laws and regulations are written now, the insurers protecting the mannequins in the new Victoria’s Secret store have federal terrorism risk protection. But the insurers protecting my life and health, and the lives and health of the other people in the mall, don’t.
One simple, cheap way to address that creepy gap would be this: Simply add a paragraph stating, in legislative language, that Congress will appoint a commission if the country ever experiences a terrorist event causing catastrophic life or health damage and will decide what to do then.
That way, Congress will not be promising anyone the reinsurance moon, but it will at least provide symbolic acknowledgement that protecting insurers that cover people is just as important protecting insurers that cover mannequins.
Allison Bell is a senior editor at LifeHealthPro.com.
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