The Delaware Insurance Department signaled April 4 that it wouldjoin the coalition of states collecting information on insurers' terrorism riskexposure.
The state will become the 12th to participate in the data , which aims to give regulatorsa more complete look at terrorism risk coverage across the country. State insurancedepartments are working to finalize a collection template, with plans to start themandatory submission process later in 2016.
Although Delaware is a late addition, it is not expected to significantlyalter the scope of information that will be collected from the insurance industry.The existing group led by New York and Missouri oversees companies that collectivelyaccount for the vast majority of terrorism coverage nationwide, Robert Detlefsen,vice president of public policy at the National Association of Mutual InsuranceCompanies, said in an interview.
The mandatory data call is being conducted alongside a similarprocess operated by the Federal Insurance Office. The FIO is running a voluntarydata submission process as part of a congressional mandate to report on the effectivenessof the federal Terrorism Risk Insurance Program. There was hope early on that theagency could work with the NAIC on a single collection process, but federal andstate officials failed to reach an agreement in 2015. That prompted the NAIC toabandon a planned nationwidetemplate, and in the wake of that decision, 11 states banded together to createthe current collection process.
During a session at the NAIC's Spring National Meeting, New YorkDepartment of Financial Services General Counsel Martha Lees pledged to "continueto offer" to share data with the FIO. But in the meantime, she assured industrygroups that the states would try to make their data call as streamlined as possible.
Although the FIO's collection process is voluntary, insurancecompanies are being encouraged to submit information if they have the resourcesto do so. The industry is eager to build a case that insurers need the TerrorismRisk Insurance Program to serve as a federal backstop and hopes that the mass amountsof data submitted to the federal government will provide the necessary evidence,Detlefsen said.
"The provision in the [Terrorism Risk Insurance Act] reauthorizationbill that requires FIO to submit this report to Congress was inserted into the billby members of Congress who are skeptical of the TRIA program," Detlefsen said,adding that FIO Director Michael McRaith is a supporter of a federal backstop. "Hethinks the program is effective and would like very much to write a report to Congressthat reflects positively."