Terrorism's Impact on Insurance Markets
Carter, Ray, THE JOURNAL RECORD
The nation's property and casualty insurers reported $8.47 billion in net claims arising from the Sept. 11 terrorist attacks, according to a review by Weiss Ratings of more than 1,100 year-end 2001 statements filed with the National Association of Insurance Commissioners.
"The losses from the terrorist attacks made a big dent in the capital of some firms, especially general reinsurance," said Martin D. Weiss, chairman of Weiss Ratings. "However, even in this worst- case situation, the companies still had adequate capital to cover the losses. Most insurers were positioned to weather the losses through reinsurance coverage and strong capitalization. Unfortunately, despite the industry's strength, this catastrophic attack will result in yet another round of rate increases for consumers."
Last year's terrorist attacks contributed to the property and casualty insurance industry's first-ever loss and propelled the Insurance Services Office to create a terrorism exclusion clause for commercial policies. The new language, adopted by 45 states, Washington, D.C., Puerto Rico, and Guam, excludes coverage on claims arising from acts of terrorism. Of the five remaining states, New York and California are considering revisions to the ISO exclusion, while Texas and Florida have yet to rule on any form changes. Only one state, Georgia, rejected the new terrorism exclusion language.
Looking back at Penn Square
Oklahoma City University School of Law in conjunction with the Oklahoma Bar Review and the Conference on Consumer Finance Law will host "Penn Square Bank -- 20 Years Later; An Examination into the Causes, Effects, Responses, and Continuing Consequences of the Banking and Deposit Insurance Crises of the 1980s."
The conference is scheduled Oct. 3-4 in at Sarkeys Law Center on the OCU campus. Sponsors include BancFirst and the Clyde R. Evans Charitable Trust of Oklahoma City.
On July 5, 1982, federal regulators closed Penn Square Bank of Oklahoma City. "Penn Square Bank-20 Years Later" will explore the events leading up to the bank's closure, its causes and effects, and how the closure affected the lives and businesses of people throughout the United States. The program will also cover the legislative and regulatory responses and the ramifications for the entire financial system and other consequences.
"The Penn Square Bank failure shook the financial world and ushered in a deposit insurance crisis that dramatically changed the American financial landscape," said OCU Professor of Law Alvin C. Harrell, program coordinator and executive director of the Conference on Consumer Finance Law. "This was an important national event. The way financial intermediaries are regulated and governed today can be traced back to changes that began with the Penn Square Bank failure."
In addition to Harrell, speakers from Oklahoma City include V. Burns Hargis, Bank of Oklahoma; Paul G. Heafy, National Loan Investors Partnership; Lawrence K. Hellman, OCU School of Law dean; OCU Law Adjunct Professor D. Kent Meyers, a member of the Crowe & Dunlevy law firm; OCU Law Professor Michael Mitchelson, former director of the Oklahoma City offices of the Federal Deposit Insurance Corp.; Ross Plourde, a member of the McAfee & Taft law firm; OCU Law Adjunct Professor Laura N. Pringle, a principal in the Pringle & Pringle law firm; and John P. Roberts, attorney at law.
Norman attorneys Marion C. Bauman and Paul R. Foster are also included in the program. Bauman represented Penn Square Bank during the 1980s and Foster served as general counsel for the Oklahoma Banking Department.
Other speakers include James R. Barth, senior finance fellow at the Milken Institute, Santa Monica, Calif.; Bob Bracken, deputy regional counsel for the Federal Deposit Insurance Corp., Dallas; Victoria Dancy, with the FDIC, Dallas; Edward J. Kane, Boston College, Chestnut Hill, Mass. …