OLDWICK, N.J.–(BUSINESS WIRE)–In this AMBestTV episode, Edward Zonenberg, senior financial
analyst, AM Best, said uncertainty over the long-term fate of the
Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) should
motivate insurers to address coverage needs in the event the U.S.
Congress fails to renew the program by the end of 2020. Click on http://www.ambest.com/v.asp?v=tripra519
to view the entire program.
Zonenberg spoke about how property/casualty (P/C) insurers, particularly
those that rely heavily on TRIPRA, must contemplate its expiration.
“TRIPRA was founded in 2015 to address insurance and reinsurance
affordability and availability issues, which arose after the September
11 terrorism acts,” said Zonenberg. “AM Best’s recent commentary
addresses the issues that might arise as a result of TRIPRA expiring on
Dec. 31, 2020, since there is a lot of uncertainty about the future of
TRIPA. This program was set up to be a backstop to the regular
reinsurance system and any over-reliance on it will result in potential
problems for any company.”
Additionally, Zonenberg addressed what an expiration of the program
could possibly mean for AM Best-rated P/C insurers.
“Beginning in mid-year 2019, AM Best will compile a list of companies
that are exposed to terrorism. Companies that have material terrorism
exposure and a significant reliance on TRIPRA will be asked to present
plans to mitigate those risks and exposures. Insurers that cannot come
up with a plan to address these issues will be notified of a potential
negative rating action.”
To access a copy of this Best’s Commentary, titled, “TRIPRA
Expiration Raises Potential for Rating Downgrades for P/C Insurers,”
visit http://www3.ambest.com/bestweek/purchase.asp?record_code=285472.
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