Baker subcommittee
looks into terrorism insurance questions
Wednesday, October 24, 2001
WASHINGTON -- U.S. Rep. Richard H. Baker,
R-La., and members of the House Financial Services Subcommittee on
Capital Markets, Insurance and Government Sponsored Enterprises heard
testimony today on potential problems with the availability and
affordability of terrorism insurance in the aftermath of the September
11 attacks. The hearing, entitled "Protecting Policyholders from
Terrorism: Private Sector Solutions," is scheduled for 1:30 p.m. today
(Wednesday, Oct. 24) in room HC-8 of the U.S. Capitol
Building.
"Congress understands the need to take
action prior to adjourning this year. But House leaders also understand
that our allegiance to taxpayers means we will not respond with a
blueprint for bailouts nor by presenting the industry an open-ended
checkbook," said subcommittee chairman Baker.
In many business insurance lines,
reinsurance companies have informed primary insurers that they will no
longer offer terrorism coverage. Primary insurers contract with
reinsurance companies as a way to spread their risk. In recent days,
brokers and underwriters have reported that primary insurers would also
seek to limit or eliminate coverage for terrorist attacks, potentially
leaving many businesses with inadequate or no terrorism
insurance.
"This hearing will allow us to explore
different plans toward a solution commensurate with our free-market
principles. I'm confident we’ll find just that kind of solution – one
that is temporary but points to a long-term private-sector plan, and in
the mean time recognizes that even temporary industry reliance on
federal tax dollars must also be balanced by strong strings attached to
protect federal taxpayers. What we ultimately agree upon here, however,
I hope will send a strong message to the terrorists too, in the spirit
of Mark Twain: Reports of the free markets’ demise have been greatly
exaggerated," Baker said.
Postponed last week for anthrax-related
safety reasons, today’s hearing included testimony from the following
list of originally invited witnesses:
Panel I
- Paul H. O’Neill, Secretary, U.S.
Department of the Treasury
- Richard J. Hillman, Director, Financial
Markets and Community Investment, U.S. General Accounting
Office
- Marjorie S. Nordlinger, Senior Attorney,
Office of the General Counsel, Nuclear Regulatory Commission
Panel II
- Constantinos Iordanou, Senior Executive
Vice President of Group Operations and Business Development, Zurich
Financial Services Group
- Scott Harrington, Professor of Insurance
and Finance, Moore School of Business, University of South
Carolina
- J. David Cummins, Harry J. Loman
Professor of Insurance & Risk Management at The Wharton School,
University of Pennsylvania
- Nigel E. Easton, United Nations
Insurance Specialist, UN Conference on Trade & Development
- David Keating, Senior Counselor,
National Taxpayers Union
- Patrick Ryan, Chairman and CEO, Aon
Corporation
- Roy A. Williams, Director of Aviation,
Louis Armstrong New Orleans International Airport
U.S. House
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