CIA Annual Meeting LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 Speaker – James Witol (CLHIA) LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • Catastrophic Terrorism Insurance • Overview • • Pre-9/11 Post-9/11 United States Canada LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • Overview – Pre-9/11 • United Kingdom • • Pool Reinsurance Company (1993) Covers commercial property insurance Government reinsures Pool Re Spain • • • State-owned CCS (1941) Covers property damage and bodily injury Covers business interruption since 9/11 LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • Overview – Pre-9/11 • Israel • • • Two government programs One (1961) covers property damage Another (1970) covers bodily injury Medical care, Disability income Survivor income, Burial expenses • South Africa • • State-owned SASRIA (1979) Covers riot, public disorder property damage LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • • Overview – Post-9/11 France • • GAREAT (reinsurance pool) created in 2002 Covers commercial property and business interruption losses Pool members, international reinsurers cover losses up to € 2 bn Government reinsures losses exceeding € 2 bn LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • • Overview – Post-9/11 Germany • • Extremus (reinsurance pool) created in 2002 Covers commercial property and business interruption losses Domestic and international reinsurers cover losses up to € 2 bn (€ 3 bn prior to Mar 1, 2004) Government reinsures excess up to € 10 bn total (€ 13 bn prior to Mar 1, 2004) LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • • Overview – Post-9/11 Australia • • • Reinsurance Pool Corp created in 2003 Covers commercial property and business interruption losses Pool (eventually $300 M), backed by $10 bn commitment by government, covers losses LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • United States • • • Terrorism Risk Insurance Act 2002 (TRIA) Covers commercial P&C losses Government pays 90% up to aggregate $100 bn in excess of insurer deductibles Government recoups by industry surcharge Treasury Dept decided against extending coverage to group life in Aug 2003 Coverage terminates Dec 31, 2005 LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • • Treasury Dept to report on effectiveness of TRIA by June 30, 2005 Two bills (S. 467, H. R. 1153) propose extending TRIA by two years Both would cover group life insurance Strong congressional support for group life but question is whether TRIA will be extended at all LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • Canada • CLHIA pool proposal of 2002 • • Optional participation Covered death benefits, including ADB Pool losses up to $100 M shared in proportion to company’s weighted (group = 2 X) inforce Excess losses ($500 M - $100 M) also shared, but company can purchase optional common account reinsurance in $100 M bands LOOKING BACK…focused on the future
CIA Annual Meeting Session 2205 • CLHIA Pool (cont’d) • • • Companies = 60% of industry weighted inforce interested in participating Lack of government backstop a problem Pool did not proceed LOOKING BACK…focused on the future
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