FOR IMMEDIATE RELEASE
SUPERINTENDENT TESTIFIES BEFORE U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON FINANCIAL SERVICES
Details Latest Status of Insurance Marketplace and Crucial Need for Federal Backstop For Terrorism Losses
Superintendent Gregory V. Serio testified yesterday before the U.S. House of Representatives Committee on Financial Services Subcommittee on Oversight and Investigations. Superintendent Serio detailed the status of insurance marketplace and crucial need for a federal backstop for terrorism losses.
"The events of September 11th have raised many issues that need to be resolved; however, none is more crucial than the lack of coverage for acts of terrorism," said Serio. "I strongly urge Congress to pass legislation that will, for a period of time, appropriately limit the industrys exposure to future terrorism losses."
Elaborating on the need for a federal backstop, Serio added that "the frequency and severity of terrorism losses are impossible to predict. With a backstop for terrorism losses in place, insurers and reinsurers will be able to appropriately price the risk because they will know the extent of their exposure to terrorism. And passing the risk on to consumers and expecting them to go without coverage us certainly not the answer."
"Appropriate federal actions, narrowly tailored through a public-private partnership, should not be viewed as a bailout of the insurance industry, but as a legitimate means to facilitate the appropriate response required by the insurance market."
Serio concluded, "The insurance industry and their regulators are responding to the worst disaster in our nations history and the current crisis calls for a measured approach where the federal government would facilitate the insurance industrys response through temporary financial backing,"
A copy of the Superintendents complete written testimony is available on the Departments Web site at www.ins.state.ny.us.