Whatever be the pros and cons of governments getting involved in the insurance sector, governments in countries which have been victims of terrorist attacks such as the US, the UK, Israel and Spain, have rarely been known to shrug off their responsibilities, at least in the first few years following an attack of major dimensions. Here, we will be looking at nature and the level of government participation in various natural disasters and terrorist cover programs in different countries, to see how much of a panacea the government's involvement in core catastrophe insurance has really been. We will also look at some other peripheral but related areas that governments have typically associated themselves with, and assess the impact of these involvements, overall.
In the US, neither HR 3210, Terrorist Risk Protection Act (TRPA) passed by the House in 2001, nor S2600, Terrorism Risk Insurance Act (TRIA) passed by the Senate in 2002 to legalize all provisions for government assistance in the event of future terrorist attacks, see federal assistance in insurance as a permanent solution. In fact, in spite of the great pressure from all quarters, the US government had not committed itself to the extending TRIA by another two years (the `sunset' clause was to have come into force in December 2005) till the last moment. However, there is no doubt that the Bush government, for which terrorist threats are a high priority, does feel that federal assistance will result in stabilizing the market (a belief that many others share), not to speak of being a `comfort factor' for bewildered insurers. That terrorism is very much a reality and could erupt at any time and anywhere, is a fact that the recent incidents at Delhi, Bali and London have once again brought out. Whatever the reason, TRIA's extension by another two years, to December 31, 2007 has brought comfort to the insurance sector.
|
