HF 3720

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                             A resolution 
  1.2             memorializing the President and Congress to take 
  1.3             action to establish a federal backstop for insurance 
  1.4             against terrorism. 
  1.5      
  1.6      WHEREAS, the September 11, 2001, terrorist attacks have had 
  1.7   a substantial impact on the American economy; and 
  1.8      WHEREAS, insurers estimate that their losses from the 
  1.9   attacks could reach $70 billion; and 
  1.10     WHEREAS, insurance coverage on the World Trade Center and 
  1.11  the businesses in and around the Trade Center were multilayered, 
  1.12  and will affect insurers of all kinds, including:  
  1.13  property-casualty, liability, workers' compensation, business 
  1.14  interruption, life, health, and reinsurance; and 
  1.15     WHEREAS, insurers across the country have expressed their 
  1.16  commitment to meet policyholder obligations resulting from the 
  1.17  events; and 
  1.18     WHEREAS, insurers are concerned that they cannot adequately 
  1.19  or accurately price insurance coverage for future catastrophes 
  1.20  resulting from terrorism; and 
  1.21     WHEREAS, the private insurance industry faced an immediate 
  1.22  crisis because most reinsurance policies were renewed on January 
  1.23  1, 2002, which resulted in some reinsurers notifying their 
  1.24  customers that they would no longer cover terrorism risk and 
  1.25  caused some primary carriers to notify state insurance 
  2.1   regulators that they intend to seek exclusions of terrorism 
  2.2   coverage in their contracts with policyholders; and 
  2.3      WHEREAS, reinsurers are already notifying their customers 
  2.4   that they will no longer cover terrorism risk, and primary 
  2.5   carriers are notifying their customers that they will no longer 
  2.6   cover terrorism risk, and primary carriers are notifying state 
  2.7   insurance regulators that they intend to seek exclusions of 
  2.8   terrorism coverage in their contracts with policyholders; and 
  2.9      WHEREAS, without adequate insurance coverage, banks may be 
  2.10  unwilling to extend loans for commercial transactions, such as 
  2.11  mortgages, construction projects, and other capital-intensive 
  2.12  programs; and 
  2.13     WHEREAS, the inability of the insurance industry to cover 
  2.14  losses from future terrorist activities may require action by 
  2.15  the federal government; and 
  2.16     WHEREAS, a federal backstop would assure an available and 
  2.17  affordable insurance market for America's consumers and 
  2.18  businesses in these challenging times; and 
  2.19     WHEREAS, a federal backstop program would help to eliminate 
  2.20  market constriction and prohibitively high prices, would 
  2.21  facilitate insurance transactions necessary for commerce, and 
  2.22  would assure the broad-based ability of families and businesses 
  2.23  to recover from future incidences of terrorism; and 
  2.24     WHEREAS, without a backstop, a limited availability of 
  2.25  insurance against terrorism would have a severe adverse effect 
  2.26  on our country's economy as financiers would be reluctant to 
  2.27  lend, businesses would be reluctant to invest, and consumers 
  2.28  would be unable to afford insurance; NOW, THEREFORE, 
  2.29     BE IT RESOLVED by the legislature of the State of Minnesota 
  2.30  that Congress should speedily enact legislation to establish a 
  2.31  limited and temporary backstop for insurance against terrorism. 
  2.32     BE IT FURTHER RESOLVED that the Secretary of State of the 
  2.33  State of Minnesota is directed to prepare copies of this 
  2.34  memorial and transmit them to the President of the United 
  2.35  States, the President and the Secretary of the United States 
  2.36  Senate, the Speaker and the Clerk of the United States House of 
  3.1   Representatives, and Minnesota's Senators and Representatives in 
  3.2   Congress.