President’s Working Group On Financial Markets Releases Terrorism Risk Insurance Report
Targeted News Service |
The President's
* Insurance for terrorism risk currently is available and affordable. The availability and affordability of insurance for terrorism risk has not changed appreciably since 2010.
* Prices for terrorism risk insurance vary considerably depending upon the policyholder's industry and the location of the risk exposures.
* Such prices have declined since TRIA was enacted and, in the aggregate, currently approximate 3 to 5 percent of commercial property insurance premiums.
* Take-up rates have improved since the adoption of TRIA and are roughly stable at 60 percent in the aggregate.
* Information provided to the PWG in response to the PWG Notice indicates that the market currently is tightening in light of uncertainty as to whether TRIA will be renewed.
* The private market does not have the capacity to provide reinsurance for terrorism risk to the extent currently provided by TRIA.
* In the absence of TRIA, terrorism risk insurance likely would be less available. Coverage that would be available likely would be more costly and/or limited in scope. The report released today was developed through stakeholder engagement and using comments provided in response to a Federal Register Notice. On behalf of the Chairman of the PWG, Treasury's Federal Insurance Office coordinated the development of the report. For more information on the Terrorism Risk Insurance Program, established within Treasury by TRIA, please visit www.treasury.gov/resource-center/fin-mkts/Pages/program.aspx. A copy of the report is available here (http://www.treasury.gov/initiatives/fio/reports-and-notices/Documents/PWG_TerrorismRiskInsuranceReport_2014.pdf).
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