CHICAGO, Sept. 20 /PRNewswire-FirstCall/ -- Aon Corporation (NYSE:AOC) today released the following statement in support of the recently passed House Bill HR 2761, the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA 2007):

Aon supports the proposed changes contained in the House version of TRIREA 2007. These changes will foster broader affordability and availability for terrorism insurance for property owners, corporations, public entities and insurers.

To date, the Terrorism Risk Insurance Act (TRIA) of 2002 has provided the U.S. economy with a needed economic safety net that has encouraged the private market to cover all but the most catastrophic of losses. However, even with TRIA and its successors in place to mandate the offer of terrorism coverage, many insureds and insurers continue to struggle to meet terrorism risk transfer needs. Without TRIA's extension, the private insurance market is not prepared to replace the $100 billion in contingent capital offered by TRIA in the event of a catastrophic terrorism event. Moreover, as long as TRIA's future remains uncertain, price volatility and coverage uncertainty will grow in the insurance marketplace.

Aon views the following provisions as critical for inclusion in any final TRIREA 2007 legislation:

  -- Eliminating the artificial distinction between "foreign events," which
     are covered by TRIA, and "domestic events," which are currently not
     covered;

  -- Extending TRIA for a minimum of 10 years to provide risk management
     continuity for United States insureds;

  -- Allowing for some form of readily available Chemical, Nuclear,
     Biological and Radiological (CNBR) terrorism coverage, with appropriate
     safeguards in place to ensure that conventional terrorism capacity and
     pricing is not negatively impacted.

Aon is very concerned with TRIREA 2007's provision requiring Congress to authorize funding for the backstop on a post-event basis. If such a provision were to find its way into final extension legislation, it would present the insurance market and insureds with a degree of uncertainty regarding reinsurance claims payments that could be deemed unacceptable to rating agencies, insurers, corporations and public entities. This would, in turn, decrease terrorism capacity and increase its price.

"As the world's largest insurance and reinsurance broker, Aon's leadership position in the terrorism and property brokering arena lends the organization a unique perspective on the realities of the insurance marketplace," said Aaron Davis, director, National Property Brokerage for Aon. "While there have been positive developments on the modeling and risk transfer capacity front since TRIA's initial inception, the simple fact is that the private market is not prepared to handle this risk now or in the near term without some form of public/private partnership."

About Aon

Aon Corporation (http://www.aon.com/) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 43,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

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Source: Aon Corporation

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