Congress has taken the first tentative steps towards setting up a "reinsurer of last resort" for losses caused by acts of terrorism like those of Sept. 11.
At a House Financial Services Committee hearing yesterday, the concept of a federal reinsurance pool was promoted by insurance industry representatives as a logical next step after the industry resolves losses arising from the Sept. 11 tragedy.
Dean O'Hare, chairman of Warren, N.J.-based Chubb, said that federal legislation is needed "quickly." Already, he said, it is impossible for a commercial insurer like Chubb to acquire reinsurance that does not have a terrorism exclusion.
And if reinsurers exclude terrorism, he said, primary companies will not be able to issue policies that cover terrorism.
