The American Insurance Association has issued a statement expressing its disappointment at the rejection by New York’s Insurance Superintendent Gregory V. Serio of the model terrorist risk exclusions proposed by the NAIC (See IJ Website, Jan.9), and said that it “could create problems in New York’s commercial insurance market.”
Michael Murphy, AIA Asst. VP, northeast region, stated that, “Without a federal backstop in place, terrorism risk has become uninsurable. An insurer that takes on that risk without adequate reinsurance may jeopardize its solvency. That is why the NAIC approved the model exclusion and most states quickly approved it.”
Murphy promised that the AIA would continue to work with Serio to try and find a compromise solution, but insisted that “terrorism is an uninsurable risk,” and that the only real solution to the problem is the federal legislation, which stalled in the Senate at the end of December. He pointed out that insurers were being forced to take a ” defensive posture” with regards to terrorist risks, and that the effects of inadequate insurance coverage “is causing substantial disruption in many industries,” and urged the Senate to “move quickly to enact pending legislation once it reconvenes later this month.”|”aia, disappointed, ny’s, rejection, of, naic, terrorism, exclusion
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