National Association of Mutual Insurance Companies Issues Public Comment to Treasury Department

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, [email protected], Springfield, Virginia; 703/304-1897; https://targetednews.com

WASHINGTON, May 16 -- The National Association of Mutual Insurance Companies, Indianapolis, Indiana, has issued a public comment to the U.S. Department of the Treasury. The comment was written on May 11, 2022, and posted on May 12, 2022:

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To: Richard Ifft, Senior Insurance Regulatory Policy Analyst, Federal Insurance Office, Room 1410 MT, Department of Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220

RE: 2022 Report on the Effectiveness of the Terrorism Risk Insurance Program, Document Number: 2022-06681

Dear Mr. Ifft,

On March 30, 2022, the Department of the Treasury published in the Federal Register arequest for comment on the 2022 Report on the Effectiveness of the Terrorism Risk Insurance Program. The National Association of Mutual Insurance Companies (NAMIC) appreciates the opportunity to comment on the effectiveness of the Terrorism Risk Insurance Program (TRIP) which was established by the Terrorism Risk Insurance Act (TRIA).

NAMIC is the largest property/casualty insurance trade group with a diverse membership of more than 1,500 local, regional, and national member companies, including seven of the top 10 property/casualty insurers in the United States. NAMIC members lead the personal lines sector representing 55 percent of the auto market. Through our advocacy programs we promote public policy solutions that benefit NAMIC member companies and the policyholders they serve and foster greater understanding and recognition of the unique alignment of interests between management and policyholders of mutual companies.

Terrorism is an ongoing threat to the people of the United States and an orderly economic recovery and reconstruction effort after any significant terrorist attack is essential. To encourage private sector involvement in the terrorism insurance marketplace - and thereby protect and promote our nation's finances, security, and economic strength - the U.S. government needs a long-term, well-functioning terrorism insurance loss management plan.

NAMIC supports TRIP as a risk-sharing model between insurers, policyholders, and the federal government that - in addition to providing an immediate stabilizing effect in the short-term following a terrorist attack - has acted to create space for a robust private market for terrorism insurance to form where it would not have otherwise. NAMIC supports a long-term private/public terrorism insurance program because terrorism is fundamentally an uninsurable risk due to the inability of insurers to predict when events will occur and because of the potentially catastrophic costs of an attack. Indeed, in the absence of the federal program's backstop, such losses would exceed capacity for insurers as well as affordability for policyholders.

Since there is no expectation that terrorism risk and exposure is diminishing, as it will continue to expose the public for an indefinite period, NAMIC has supported numerous long-term reauthorizations of the TRIA program. Most recently, the TRIA program was signed into law on December 20, 2019, extending the program through December 31, 2027. To maintain a healthy private market for terrorism insurance at fair and affordable pricing, it is necessary to have wide and broad participation by insurance carriers in the U.S. and elsewhere, offering terrorism coverage. Therefore, NAMIC continues to support the current program.

In considering some of the questions posed in the request for comment, NAMIC shares several high-level remarks. NAMIC does not believe that there are any lines of insurance or coverages within certain lines of insurance currently subject to the Program that no longer require the support of TRIP to ensure the availability and affordability of terrorism risk insurance. Similarly, NAMIC does not presently see any lines of insurance or coverages within certain lines of insurance currently not subject to the Program that should be included within TRIP to promote the availability and affordability of terrorism risk insurance. Also, NAMIC is not aware of any significant insurance market changes associated with the impact of the COVID-19 pandemic that have also affected the market for terrorism risk insurance. Finally, with respect to questions about the cyber insurance market, the National Association of Insurance Commissioners (NAIC) issued an October 2021 report on this market.

Thank you for the opportunity to comment on this program that is essential to protecting the ability of the U.S. - its economy and the people and places behind that economy - to be more resilient to terrorist attacks. NAMIC encourages FIO to engage in discussions with insurers about practical TRIA items, such as data collection and other matters. Please do not hesitate to contact me if I may be of assistance or provide additional information.

Sincerely,

Thomas J. Karol

General Counsel - Federal

National Association of Mutual Insurance Companies

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, [email protected], Springfield, Virginia; 703/304-1897; https://targetednews.com