Washington–Joseph Plumeri, chairman and chief executive officer of the Willis Group insurance brokerage, has urged President Bush to develop a long-term solution for the terrorism problem his industry faces.
Mr. Plumeri's letter is a first salvo in what is expected to be a concentrated industry effort this month to ensure that a presidential panel studying the terrorism insurance market has a lot of industry input in drafting its report.
The American Insurance Association in a new brochure to members listing its advocacy priorities for 2006 said it “will continue working with the policyholder community and government officials to advance workable, long-term solutions for terrorism risk that can extend beyond the end of 2007, when the program expires.”
Mr. Plumeri, in a recent letter to President Bush, said the presidential advisory panel created by the recently-extended Terrorism Risk Insurance Act should be the vehicle for a permanent fix.
The group, he said, should “…look beyond the limited charge given to it by Congress and seek to develop practical, long-term solutions to what is likely to be a more or less permanent problem–terrorism.”
The recent two-year extension of TRIA, which provides a federal backstop for insurers when terrorism losses reach certain threshold levels, is no more than a “place-holder on the path of a long-term solution,” Mr. Plumeri wrote.
Mr. Plumeri added, “Many other countries have developed varying public/private approaches to address this problem, and we now have two years to find a more permanent solution.”
Under the new TRIA law, signed by President Bush Dec. 22, the president's Working Group on Financial Markets is required to consult with the NAIC, representatives of the insurance and securities industries, and representatives of policyholders to analyze the long-term availability and affordability of insurance for terrorism risk.
Their charter includes an examination of the situation for group life coverage and coverage for chemical, nuclear, biological and radiological events. The working group must report back to Congress by Sept. 30.
The panel has been in existence for a while, according to Treasury officials. It is comprised of representatives of the Treasury Department, the SEC, Commodity Futures Trading Commission and the Board of Governors of the Federal Reserve Board.
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