SECTION: FINANCIAL; Pg. E03

LENGTH: 320 words

HEADLINE: An Appeal on Terror Insurance

BYLINE: Jackie Spinner, Washington Post Staff Writer

BODY:




The National Association of Insurance Commissioners recommended yesterday that state regulators deny requests from companies seeking to exclude terrorism coverage from homeowners and auto policies.

During a telephone conference call with representatives from at least 45 states, the regulators unanimously agreed that such exclusions were not necessary "to maintain a competitive market" and that granting them may violate some individual state laws. All 50 states and the District have received requests for terrorism exclusions in both commercial and personal lines of property and casualty insurance.

Most regulators have been granting the exclusions for commercial policies after the national association recommended in December that states allow them if a terrorist act causes at least $ 25 million in damage.

Primary insurers sought the exclusions after the reinsurance market for terrorism began to dry up following the Sept. 11 attacks. Primary insurers buy reinsurance to help spread their risk of loss.

Iowa Insurance Commissioner Terri Vaughan, who is president of the national group, said personal lines insurers are not experiencing the same difficulties obtaining reinsurance as commercial insurers are.

"Our sense is that there is reinsurance available in the personal lines," she said.

But Robert Zeman, vice president and assistant general counsel for the National Association of Independent Insurers, said that is not the case.

"Personal lines insurers are facing major problems," he said.

The regulators said they will consider requests for exclusions from personal lines on a case-by-case basis, leaving the door open to grant permission for firms that may be particularly vulnerable.

"The companies will have to go back and justify it, and if they can do it, we will consider the exclusions," said the District's insurance commissioner, Lawrence H. Mirel.

LOAD-DATE: January 30, 2002