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AM Best: Terrorism Risk Insurance Act reauthorization shifts more terrorism risk to insurers

The reauthorization continues federal support while the public summary leaves retention and attachment terms unspecified.

At a glance

  1. The assessment appears in a Best's Commentary discussed by Steven DeLosa, a senior financial analyst at AM Best, in this week's Best's News, published October 16.
  2. The public summary does not state the length of the reauthorization, the retention or attachment terms, or the size of the shift toward insurers.
  3. AM Best treated similar reinsurance structures as a capital-rules test before, most recently in its warning that reserve credits in offshore annuity reinsurance are rising faster than the collateral backing them.

AM Best says the reauthorization of the Terrorism Risk Insurance Act extends the federal backstop while leaving insurers to carry more terrorism risk. The assessment appears in a Best's Commentary discussed by Steven DeLosa, a senior financial analyst at AM Best, in this week's Best's News, published October 16.

The public summary does not state the length of the reauthorization, the retention or attachment terms, or the size of the shift toward insurers. AM Best treated similar reinsurance structures as a capital-rules test before, most recently in its warning that reserve credits in offshore annuity reinsurance are rising faster than the collateral backing them.

Reported by the Insurance regulation desk from AM Best News. Published . Corrections

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