NY Senate pushes Congress for action on terrorism cover

The New York State Senate has formally adopted a resolution urging U.S. Congress to set up a temporary backstop for terrorism reinsurance, the Alliance of American Insurers (AAI) is reporting. The resolution calls the p&c market “a fundamental underpinning of our national and state economy”, and notes that future attacks may exceed the industry’s ability to pay claims because of the withdrawal of terrorism reinsurance following the September 11 terrorist attacks. “While the insurance market adjusts to this uncertainty, businesses throughout our State and the Nation are no longer adequately protected from the economic losses caused by future acts of terrorism,” the resolution states.It goes on to say that the delays in pushing through a shared-risk or excess loss backstop program by Congress are a detriment to “thousands of New York businesses”.”This legislative body urges the New York State Congressional delegation to enact legislation that allows for a transition period for the private insurance industry to build capacity to absorb any future losses while preserving state insurance regulation and consumer protections.”In response to the resolution’s passage, AAI regional vice president John Cucci says, “a federal backstop program is critical to the well-being of the commercial real estate market and the general business community, particularly in New York State where commercial transactions were not being completed due to lack of terrorism coverage or its tremendously high cost.”