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White House Calls on Insurers to Encourage Insureds to Adopt Security Measures

A senior White House official is calling on the insurance industry to play an important role in the nation's war against terrorism -- one that...
January 28, 2003

A senior White House official is calling on the insurance industry to play an important role in the nation's war against terrorism -- one that goes beyond economics. The White House hopes the insurance industry will provide incentives for property owners and other insureds to adopt prudent security measures, according to Richard Falkenrath, special assistant to the president for homeland security.

Speaking at a recent conference in Washington, D.C. on the Terrorism Risk Insurance Act of 2002, Falkenrath said incentive-based systems aimed at enhancing security are not much different than providing discounts to homeowners who invest in alarm systems. He said the industry could encourage policyholders to take prudent measures to reduce their vulnerability to attack. Falkenrath noted that doing so would be difficult because terrorism is not the type of risk that lends itself to statistical analysis, but he added the industry needs to figure out a way.

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