Tuesday, February 25th, 2003 — The language of the Terrorism Risk Insurance Act is so unclear that it will spark legal battles over coverage, and cause a variety of problems for insurers and their commercial clients, a research firm executive said today.
"If you don‘t have a clear definition you will wind up with all sorts of disputes. We already have that too much in the industry," commented Bruce Thomas, vice president at Conning Research and Consulting, Inc. in Hartford, Conn.
Conning yesterday released a report "Terrorism Risk Insurance Act of 2002: Problem Not Solved," which found the legislation difficult to implement and administer.
Under the Act, foreign terrorism is covered and domestic terrorism is excluded. The Secretary of the Treasury, the Secretary of State and the Attorney General would have to rule that a destructive act qualifies as terrorism.