The market for terrorism insurance coverage, be it conventional or captive, is strongly dependent on the Terrorism Risk Insurance Act (TRIA) programme, according to the Vermont Captive Insurance Association (VCIA).
VCIA issued the comments to the US Treasury in response to proposed rules about whether to apply TRIA to self-insurance arrangements, including captive insurance companies.
The association believes captive insurers will continue to play an important role in providing coverage relating to terrorism risk, but particularly nuclear, biological, chemical and radiological (NBCR) risks, given the particular difficulty in obtaining NBCR coverages from conventional insurers.
VCIA argued that like traditional insurance companies, captives are licensed to sell insurance or conduct reinsurance operations in at least one state and meet specific strict regulatory criteria.
Vermont shared its concerns about the proposed blanket exclusion of captive insurers from the definition of "small insurers”.
VCIA said: “TRIA's provisions designed to help small insurers avoid undue burden by the programme requirements make sense, but we believe that the same policy concerns behind avoiding undue burden to conventional small insurers should be applied to captive insurers."
