Star Fire wrote:
I agree, but I believe there are some individuals with more to gain,
than any of us by catalyzing the conflict.
Oh and I agree, these events never happen for one reason only. There
are usually multiple "independent" issues involved; just like 9/11.
Here's one issue that may have been involved in the London bombings.
It's often the boring stuff that people never pay attention to that's
usually the most important. In this event, if not in every such event,
the important stuff is INSURANCE.
http://www.securityinfowatch.com/art...iteSection=308
Report: Private Markets Not Prepared to Cover Major Terrorism Losses
Despite improvement in insurance markets since Sept. 11, major event
could stretch past what government and private markets could handle
BestWire Services via NewsEdge Corporation
In a report on the insurance industry's ability to handle
terrorism-related losses, the Organization for Economic Co-operation
and Development warned that while terrorism insurance markets have
improved since the Sept. 11, 2001 catastrophe, "there are continuing
shortfalls in coverage," and private markets are still not prepared to
cover "extremely large losses" that could yet occur.
The 290-page report, "Terrorism Risk Insurance in OECD Countries," said
that estimated maximum losses from a single large terrorist attack
range from $50 billion to $250 billion. "The losses associated with
very large-scale terrorist attacks can remain beyond the capability of
the private insurance and reinsurance industry to price and absorb
alone," the report said.
In some OECD countries, a "mega terrorism" event could result in losses
exceeding the joint compensation capacity of both private markets and
governments to compensate "without threatening national economic
stability." Given that, it may be necessary for some form of
cooperative agreements between countries in the future, the OECD said.
The report found terrorism insurance take-up rates are low in a variety
of countries. At year-end 2004, about half of companies in the United
States were insured, and less than 3% of eligible firms had contracted
with Germany's terrorism compensation plan. "Under these circumstances,
the economic and social impact of a new large-scale attack could be
greater than in 2001," the report said. "OECD countries concerned
should develop risk awareness and could consider incentives to extend
coverage and increase the financial capacity of terrorism risk
compensation mechanisms."
The OECD noted that while chemical, biological, radiological and
nuclear terrorism risks are generally excluded from insurance coverage
and are not always fully covered through existing government-backed
insurance plans, "governments should work with the insurance industry
to find sustainable solutions for coverage."
Terrorism is still a thorny issue for insurance markets, since it is
highly unpredictable and more difficult to cover than other types of
catastrophes, the OECD said. Risk modeling has improved for terrorism,
but still "falls short of making the likelihood of future attacks more
predictable," the report said.
While financial markets may provide some additional capacity for
terrorism risk, so far they have not shown much willingness to do so,
according to the OECD.
While the OECD advises member countries to "rely as much as possible"
on private insurance markets for terrorism coverage, the group added
that "government intervention may be needed to increase -- or maintain
-- terrorism insurance availability at an affordable price, where
private markets lack capacity."
One way governments can help is by making changes in the tax and
accounting environments to reduce the cost to the insurer of building
up reserves to cover future catastrophic losses. Governments also can
promote the development of alternative risk transfer strategies, the
OECD said.
The report gave a nod to public-private partnerships such as those
established in Australia, France, Germany, the Netherlands, Spain, the
United Kingdom and the United States as successful efforts to stabilize
the insurance markets following large-scale or frequent attacks. The
report suggests a "layered approach" to terrorism risk coverage,
involving insureds, insurers, reinsurance, a coinsurance or reinsurance
pool, and the government as a last resort, could successfully mitigate
the risks.
The OECD report was published just days after a much-anticipated U.S.
Treasury report recommended the U.S. Terrorism Risk Insurance Act not
be renewed in its present form once it expires at the end of this year.
TRIA, passed by the U.S. Congress in response to the Sept. 11
catastrophe, set up a formula under which the U.S. government acted as
ultimate backstop to any future terrorism losses suffered by insurers
and insureds above a certain amount.
According to the U.S. Treasury, TRIA served its purpose in stabilizing
shaken property/casualty markets after the attack, but has since
distorted market forces by slowing private-sector development of
terrorism coverage and lulling those buying insurance into complacency
regarding their own risk management strategies (BestWire, June 30,
2005).
It is still uncertain whether Congress will heed Treasury's advice and
refuse to renew TRIA.
The OECD is a coalition of 30 member countries dedicated to democratic
institutions and a market economy. Members include 22 European states,
Japan, South Korea, Australia, New Zealand, the United States, Canada,
Mexico and Turkey.
www.thehartford.com/about/tria/
Terrorism Risk Insurance Act (TRIA)
Although the House Financial Services Committee approved H.R. 4634,
"The Terrorism Insurance Backstop Extension Act of 2004," Congress
adjourned on October 9, 2004 without passing the bill. This piece of
legislation would have extended TRIA through 2007 and would have
expanded its scope to include group life insurance. As it stands, TRIA
is set to expire on December 31, 2005.
The effort to gain passage of a TRIA extension was supported by more
than 2000 Hartford employees and agents throughout the country who took
the time to contact their federal legislators. In addition, The
Hartford worked together with the rest of the insurance industry and
with our commercial policyholders to urge Congress to consider H.R.
4634. Though we did not succeed in convincing Congress to act on a
TRIA extension before it adjourned, we remain convinced that a federal
terrorism backstop is critical for the health of the insurance
industry, our policyholders and the overall economy.
Although Congress is scheduled to begin a brief "lame duck" session on
November 16, legislative action will likely be deferred until 2005.
http://www.thehartford.com/higfiles/pdf/TRIAlawSUM.pdf
http://www.thehartford.com/higfiles/pdf/TRIAlaw.pdf
http://www.thehartford.com/higfiles/..._Dealstudy.pdf
http://www.rims.org/Content/Navigati.../TRIA_Info.htm
http://www.oecd.org/document/3/0,234..._1_1_1,00.html
OECD countries warn of continuing shortfalls in insurance coverage
against terrorism
05/07/2005 - Nearly four years after the September 11 terrorist acts
that hit the US - the most costly disaster ever for the insurance
industry - conditions on terrorism insurance markets have improved. Yet
according to a new OECD report, there are continuing shortfalls in
coverage, which could be revealed by another large-scale attack.
Terrorism Risk Insurance in OECD Countries examines market evolutions
since 2001, as well as industry and government initiatives to address
the challenge of modern terrorism compensation. One of its main
conclusions is that private markets are not yet able to fully cover the
extremely large losses that could result from terrorist acts in the
future.
http://news.findlaw.com/hdocs/docs/i...tria112602.pdf
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