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| Home Front: WoT |
| Certifying an ‘Act of Terror’ |
| 2013-04-17 |
| Here’s another wrinkle to add to the realm of terrorism law, which has been on our radar this week. As horrific as it was, the Boston Marathon bombing isn’t likely to qualify as a terrorist attack for the purposes of insurance coverage. President Barack Obama said Tuesday that it’s an act of terror whenever “bombs are used to target innocent civilians.” But in the world of terrorism insurance, that’s not the definition that matters. In order to trigger the post-9/11 federal reinsurance program, a violent act must be certified as an “act of terrorism” by the Secretary of the Treasury — currently Jack Lew — in agreement with the Secretary of State and the U.S. Attorney General. A spokeswoman for the Treasury Department said that no certification has been issued. After the September 11th attacks, Congress sought to stabilize the terrorism insurance market in key industries such as construction and commercial real estate. The result was a backstop known as the “Terrorism Risk Insurance Program,” a system for spreading catastrophic losses between the U.S. government and private insurers. As prices for terrorism coverage have come down, about 60% of commercial policyholders have purchased coverage over the past few years, according to a 2012 research report prepared for Congress. The biggest buyers are larger businesses in cities with higher risk exposure. |
| Posted by:tipper |