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FIO: Set Aside a Portion of Terrorism Premiums

The Federal Insurance Office reports that lawmakers need to consider requiring insurers that participate in the Terrorism Risk Insurance Program to set aside a portion of terrorism risk premiums...
July 6, 2016

Terrorism

The Federal Insurance Office (FIO) reports that lawmakers need to consider requiring insurers that participate in the Terrorism Risk Insurance Program to set aside a portion of terrorism risk premiums as a hedge against losses from future terrorist attacks. Insurers have collected about $24.24 billion in premiums associated with the program since 2003, without paying a single claim, according to the report, and these premiums have contributed modestly to the surplus levels of participating insurers.

“Some portion of the premium collected for terrorism risk clearly represents the appropriate cost of the capital that insurers must devote to surplus to support the provided terrorism risk insurance,” the FIO said in the report.

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