There is a high probability that an NBCR
attack would result in catastrophic TRIA-triggering losses, and such events should be addressed in any potential revisions of the program.
As the federal backstop currently remains in place, many insurers have sought to acquire additional protection via reinsurance (excluding NBCR
events) that protects them for virtually all certified conventional losses.
A few large property owners have engineered some NBCR
coverage by forming captive insurers, which are eligible for TRIPA protection, Peters noted.
Especially important to the various policyholder groups that are CIAT's members, according to DePoy, are provisions of TRIREA that would lengthen the term of the program to 15 years; give businesses the ability to secure NBCR
coverage under the same terms and conditions as for conventional risks; eliminate the existing legislation's distinction between foreign and domestically-sponsored acts of terror; and reduce the program's trigger level.
101 require the agency head to determine the purchase supports a contingency operation or is in defense against or recovery from an NBCR
One agent group, however, strongly favors coverage for NBCR
Yesterday, the Government Accounting Office (GAO) released a report which confirmed that NBCR
risks are uninsurable in the private insurance market because of the potential for virtually infinite risk of loss, and because of the horribly unique characteristics of such attacks.
I believe that the federal government will have the opportunity to get out of terrorism insurance when insurance companies have the capabilities to measure terrorism risk--though it is unlikely that insurance companies would ever have the ability to cover NBCR
Coverage for nuclear, biological, chemical and radiological (NBCR
) - Marsh supports requiring insurers to offer coverage for NBCR
and increasing the federal government's share of risk for these perils rather than for conventional terrorism exposures.
The specific provisions regarding NBCR
coverage under the program are critical for policyholders and insurers, and we intend to continue to work with Congressional Leadership on this area to insure that the legislation strikes a workable balance for all.
But many insurers question whether most smaller and midsize insurers could comply with an NBCR
mandate, arguing that it would have significant adverse implications for their credit and financial strength ratings, their ability to raise capital, and ultimately, their solvency.
Government Accountability Office (GAO) and the President's Working Group on Financial Markets, Ditchman noted that that the private market has not provided coverage for NBCR
attacks outside of workers' compensation lines.