A trade group representing Chubb Corp and Hartford Financial Services Group Inc proposed a new terrorism insurance pool that would make the US federal government the lender of last resort.
The American Insurance Association released guidelines for a plan to make reinsurance for terrorism available following the Sept. 11 attacks on the World Trade Center and the Pentagon.
Chubb Chief Executive Dean O'Hare warned Congress this week of an emerging crisis because many reinsurance companies, companies that insure insurers, aren't providing coverage for terrorism. That may become a problem for developers of commercial real estate projects or other ventures.
Primary insurers such as Chubb buy reinsurance to diversify risks from large insurance policies; without reinsurance, individual companies alone can't afford to underwrite large corporate policies.
The American Insurance Association said it wants to preserve the private insurance marketplace while having the US government become the insurer of last resort. The Treasury would provide funding only if the reinsurance pool drops by 80 percent in a year.
"The idea is not to replace the private market; it is to supplement it," said Julie Rochman, senior vice president of AIA.
"We're trying to keep this as focused on the private marketplace as possible." Chubb and other US insurers said they aren't looking for a bailout and that they can handle claims from the Sept. 11 terrorist attacks.
Terrorism reinsurance was discussed at length Wednesday at a House Financial Services Committee hearing. Committee members said they intend to move cautiously. Republican Representative Richard Baker of Louisiana, who heads a Financial Services panel said congressional action now would be premature.
Senator Chris Dodd, Democrat of Connecticut and a senior member of the Senate Banking Committee, has been working on his own proposal. "We're trying to put something together that will stabilize this market in a way that relies on market discipline and doesn't do away with moral hazard, and protects taxpayers to the maximum extent possible," said Dodd spokesman Marvin Fast.
The AIG plan creates a federally chartered mutual insurance company. Property and casualty companies could participate voluntarily, and the pool would be funded through insurance premiums. It would be governed by member companies and the US Treasury, which would regulate it.
The pool would sell terrorism reinsurance to primary insurers and cover all lines of property and casualty insurance, including automobile, homeowners, commercial property, liability and workers compensation policies.
That's is broader than a terrorism reinsurance plan in place in the UK. Pool Reinsurance Co Ltd, which was created in 1993 in wake of Irish Republican Army bombings in London, covers just commercial property insurance.
Pricing of the terrorism reinsurance would be as market-based as possible, relying on actuaries. The reinsurance pool would be exempt of state and federal taxes and wouldn't start paying a premium to the federal government until its pool reaches US$10 billion, according to the AIA proposal.
The pool would develop comprehensive underwriting guidelines to govern the provision and pricing of reinsurance risk.
The AIA also is proposing the US government directly provide war risk reinsurance, much like it provides federal crop or flood insurance.
The government would underwrite insurance protection for war risks that are traditionally excluded from standard insurance policies. Rochman said the war insurance proposal is separate from the terrorism reinsurance plan.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained