The Risk and Insurance Management Society (RIMS) commends the Government Accountability Office (GAO) for its report on the availability of insurance coverage caused by acts of terrorism involving nuclear, biological, chemical or radiological (NBCR) weapons. The GAO was tasked to undertake the study by Congress when it passed the "Terrorism Risk Insurance Program Reauthorization Act of 2007" in December of last year.
RIMS has been actively involved in advocating for the availability of NBCR insurance and served as a resource to GAO when it conducted its study. RIMS applauds GAO for its comprehensive analysis of the extent to which NBCR is available; the difficulty in accurately predicting risk and damage associated with these events; and the consequent challenges with regard to insurance pricing. Despite concluding that insurance for NBCR is not widely available, the GAO stopped short of recommending specific policy solutions. RIMS maintains that the country's economic health and well being require a long-term solution that addresses both conventional and NBCR terrorism risks. The need for this solution was reinforced strongly in a recent study by the Commission on the Prevention of WMD Proliferation and Terrorism that declares that within the next five years it expects an NBCR-related attack to occur.
RIMS calls for a long-term solution that will assist organizations to manage NBCR risks by the creation of a separate federal insurance program, rather than a short-term solution requiring insurers to "make-available" insurance for these risks. Because NBCR exposure is not calculable for premium purposes—and is therefore an uninsurable risk—RIMS is concerned that smaller insurers may opt to exit the NBCR coverage market, leaving only larger insurers to offer minimum limits at a high price. RIMS calls on the 111th Congress to revisit the issue of NBCR coverage in light of the GAO study findings.