Posted: 4/1/2008

NAMIC Meets with GAO on Government’s New Terrorism Insurance Backstop

NAMIC representatives met with the Government Accountability Office March 28 to discuss the GAO's studies regarding terrorism insurance for nuclear, biological, chemical, and radiological risks, as well as terrorism insurance availability and affordability in specific markets as mandated by the latest extension of the Terrorism Risk Insurance Act.

The Terrorism Risk Insurance Program Reauthorization Act of 2007 contained a mandate for the GAO to study specific markets in the United States where there are unique capacity constraints on the amount of terrorism risk insurance available. Specifically, the study is to contain an analysis of both insurance and reinsurance capacity in specific markets, including pricing and coverage limits in existing policies; an assessment of the factors contributing to any capacity constraints that are identified; and recommendations for addressing those capacity constraints. The study is expected to be released late summer of 2008.

TRIPRA also contained a mandate for GAO to study the availability and affordability of insurance coverage for losses caused by terrorist attacks involving NBCR materials. This study is to examine the availability and affordability of insurance coverage for losses caused by terrorist attacks involving NBCR materials; the outlook for such coverage in the future; the capacity of private insurers and state workers' compensation funds to manage risk associated with NBCR events; and recommendations to expand the availability and affordability of insurance for NBCR events. This study is expected to be released by the end of 2008.

Direct questions to NAMIC’s Senior Federal Affairs Director Marliss McManus.