The US government's proposed public-private alternative to a Pool Re-style insurer of last resort has been criticised by Converium's group chief executive officer.
Speaking exclusively to Insurance Times in Baden-Baden, Dirk Lohmann said: "The Bush administration has tried to come up with a half answer and I am concerned that will not be fully adequate. Many would have preferred to see a Pool Re concept than what is currently being proposed."
Under the new three-year system, the US government will cover 80% of terrorism losses up to $20bn (£13.7bn) and 90% up to $100bn (£68.7bn) in the first year. This will decrease over the three-year period.
Lohmann added he was also concerned about other factors affecting the market.
He said: "There are probably some inconsistencies in insurance policy wordings which need to be addressed in dialogue between insurers and reinsurers.
"For example, with anthrax, you could have the issue of loss of use of property because of contamination. Contamination is one of the words used in the pollution exclusion. Is that a pollution event and hence already excluded or is it malicious damage?" Lohmann said.
