WASHINGTON–Any long-term solution to the problem of insuring terrorism risk will require some degree of federal government involvement, according to the American Insurance Association.
In response to Congressional requests regarding insurers' needs to properly manage terrorism risk, the AIA has drafted a concept paper calling for a permanent structure similar to the current Terrorism Risk Insurance Act. It also calls for special federal backing for losses due to chemical, biological, nuclear or radiological attacks.
“Because potential insured losses vastly exceed the amount of potential private sector capital, a public policy solution is still critically needed upon the expiration of the current TRIA extension legislation,” the group said in the paper.
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