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Insurance Industry Exploits September 11 Terror Tragedy Is greed the greatest evil of mankind? The insurance industry has now joined those who exploit the terrorist attacks for selfish purposes. By the Staff of American Free Press Congressional action is being sought in the wake of mounting evidence that insurance firms are exploiting the terrorist attacks to increase costs outrageously at the same time the industry is seeking taxpayer handouts. “It would be politically embarrassing for Congress to put the taxpayer on the hook for losses from terrorism while insurers hike prices beyond reason,” said Robert Hunter of the Consumers Federation of America and a former Texas insurance commissioner. “Congress must act to prevent insurance companies from charging excessive rates while taxpayers pick up the tab.” The CFA, citing several instances of price gouging, urged Congress to prevent insurance companies from charging unjustifiable rates from the same taxpayers being asked to subsidize the industry. The interstate commerce clause of the Constitution empowers Con gress to intervene with national insurance companies. Several examples of price gouging were cited by the CFA during a Washington news conference: • During debate on terrorism insurance in the House on Nov. 29, it was reported that the annual cost of insuring Giants Stadium in New Jersey’s Meadowlands has in creased five-fold from $700,000 to $3.5 million. • The Wall Street Journal reported that “insurance companies are already raising prices by 100 percent or more on some lines of commercial and industrial insurance . . . aviation underwriters have raised premiums for airlines by 200 percent to 400 percent . . . New York trophy properties are seeing giant rate increases . . . medium-sized and small corporate policyholders are also seeing premiums jump.” • Reinsurers are eliminating terrorism coverage from their policies but then, on top of that, hugely raising prices for the remaining coverages not related to terrorism. For example, the giant reinsurer, Allianz, has announced increases of 20 to 50 percent. A company spokesman added “that it might rise, in some cases, to 200 percent.” • Insurance Services Office, which files policy provisions for many insurers, has announced that it is asking for terrorism exclusions in insurance policies across the nation. • Rolf Hueppi, head of Zurich Financial Services, told a meeting of insurers on Nov. 27 that, in regard to the terrorist attacks of Sept. 11, the industry “. . . needed it to operate efficiently. The players who are strong, in a responsible manner, and are aggressive, will be the winners in the next 15 years.” The CFA said: “Hueppi clearly meant that the terrorist attack opened the door for global giants . . . to raise premium rates.” In a letter to congressional leaders, the CFA asked that any legislation providing taxpayer assistance to the insurance industry “prohibit terrorism exclusions, require a separate terrorism line item on insurance bills that is explained and justified, and require states to certify that rates are not excessive and that coverage for terrorism is fully available.” The CFA was also urged state insurance commissioners to reject proposals to weaken oversight of insurance rates and coverage. “You’d think that state regulators would be trying to figure out how to strengthen their ability to reject un warranted rate increases and attempts to eliminate terrorism coverage,” Hunter said. “Instead, they are considering how to reduce their ability to protect consumers and small businesses at this time of uncertainty.” |
