Consumer Federation‘s Terrorism Ins Plan Based on ‘Wishful Thinking‘
Friday, October 26th, 2001 CatastropheA proposal to establish a federal terrorism reinsurance program offered by the Consumer Federation of America (CFA) is based on faulty assumptions and wishful thinking, according to the National Association of Independent Insurers (NAII). "The CFA‘s proposal assumes that the insurance industry could withstand another catastrophic hit of $35 billion or more and remain viable and solvent," said Carl Parks, NAII senior vice president, government affairs. "It‘s not clear how CFA arrived at this conclusion, but we disagree with it. "The industry is capable of paying all covered claims resulting from the September 11th attacks. But coverage for future terrorist losses is in jeopardy because it is currently impossible to quantify and price the risk. Before the attacks, the industry had about $300 billion in capital.
