Poolman Denies Insurance Companies Use of Terrorism Exclusions;Urges Congressional Support for Terrorism Bill
Posted on 11/29/2001
FOR IMMEDIATE RELEASE
Contact: Jim Poolman
November 29, 2001
Bismarck, ND - Insurance Commissioner Jim Poolman announced today that approximately 60 requests to permit insurance companies to exclude damage caused by terrorist acts have been disapproved. Letters have been sent to these companies explaining the denial.
"Company attempts to exclude coverage for terrorism are premature, as we are awaiting action by Congress on terrorism insurance legislation. Denying businesses and building owners this vital coverage before a federal proposal has been decided leaves our local businesses with gaps in coverage that could be devastating," warned Commissioner Poolman.
Congress is deliberating bills that would provide a federal reinsurance plan, which would provide certainty to the insurance companies and consumers about the potential financial consequences that another terrorist attack could cause.
"It's imperative to both our local and national economy that Congress take action immediately on a federal reinsurance plan before reinsurers withdraw from the market," Commissioner Poolman said. "Relief is needed now, and failure to act will surely be a devastating blow to the economy and provide an unacceptable lack of coverage for building owners, businesses and the citizens of North Dakota."
Reinsurance is a form of coverage purchased by insurance carriers to protect themselves from major catastrophes, such as the terrorist attacks of September 11. As many as 70% of the reinsurance contracts that cover primary insurers will expire at the end of this year. The rest will expire shortly thereafter. These reinsurance companies have said that absent federal intervention, they will not be able to offer coverage for terrorism. As a result, primary insurers will have no access to coverage and thus be financially unable to cover terrorism in the policies they sell to businesses. This leaves businesses exposed to the full cost of a terrorist act.
"We need Congress to act now, to make sure that America's consumers can get the coverage they need. Time is running out." Poolman stated.