Says State Regulation Of Terror Cover Is Mixed
By Steven Brostoff, Washington Editor
NU Online News Service, Jan. 22, 4:10 p.m. EST, Washington?If implementation of the Terrorism Risk Insurance Act is a test of state regulation, then regulators won't ace the test, but they won't all get failing grades either, according to outgoing Illinois Insurance Director Nat Shapo.
Speaking today at a seminar sponsored by the American Insurance Association in Washington, Mr. Shapo noted that many observers say the terrorism insurance program is a test of state regulation.
He believes the states will pass, in part, and fail, in part.
States will pass, Mr. Shapo said, in that they will work diligently to implement the program.
But states will fail the test in some ways because the leeway the legislation allows them assures there will not be 100 percent uniformity, he said.
Where federal legislation allows discretion, and where there are no specific requirements, history shows there will be state variations, Mr. Shapo said.
There will be a good faith effort at uniformity, he said. But there will always be political obstacles in some states to achieving uniformity, whether due to a philosophy of individuality or specific local concerns.
But Mr. Shapo emphasized that both the insurance industry and the state regulatory system performed admirably following the Sept. 11, 2001, terrorist attack.
The regulatory system, he said, was part of the post-9/11 success story in paying claims to victims of the attack.
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