The insurance industry is failing to offer cover for nuclear, biological and chemical acts of terrorism as part of insurance policies, says a Moody's report.
The insurance industry is failing to offer coverage for nuclear, biological and chemical acts of terrorism as part of insurance policies, says a Moody's report.
The ratings agency report suggested that the failure of insurers to back terror risks indicated that the US government's new terrorism insurance legislation, the Terrorism Reinsurance Act (Tria), is failing to meet its targets.
Late last year, President Bush signed Tria to help cover insurance losses related to terrorist acts. The law forces those insurers that stripped terrorism coverage from their policies after 11 September to reinstate it.
While Tria provides a financial safety net to minimise losses caused by terrorism, property and casualty insurers remain wary about extending coverage for such catastrophes.
The report concluded: "Insurers have employed the lone underwriting tool currently at their disposal before renewals occur, which is to quote high prices for some risks in order to discourage take-up in cities considered vulnerable to terrorist attacks."
