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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