- The Washington Times - Saturday, April 6, 2002

D.C. Delegate Eleanor Holmes Norton plans to introduce legislation to prevent insurance companies from raising rates or canceling policies of businesses and homeowners near potential terrorist targets if she finds the practice is becoming widespread.
At the request of Mrs. Norton, a Democrat, the D.C. Department of Insurance and Securities Regulation agreed this week to conduct a survey of businesses to determine whether insurance rates are rising or policies are being canceled near potential terrorist targets, such as the White House.
She called any changes to policies because of terrorism risks "shameful, unacceptable and unnecessary."
Mrs. Norton said she was responding to a report Wednesday's editions of The Washington Times that quoted businessmen near the White House saying their policies were being canceled or modified to exclude acts of terrorism or that insurers notified them that rates would increase.
"Swift action must be taken now to ensure that such practices do not spread to other areas of the District and to other cities and areas of the country," Mrs. Norton said.
Otherwise, she said, terrorists could determine insurance coverage and insurance companies would be allowed to set rates based on hysteria rather than statistical risks.
"It's not market-driven," Mrs. Norton said. "It's impressionistic. To cancel policies or to raise premiums based on terrorist targeting is to operate on the basis of no credible experience showing there is a pattern that is predictable. One of the things we know about terrorism is that they operate so as not to be predictable."
Raising insurance rates for businesses close to the White House was unwarranted, she said.
"The White House is better protected than any building in the universe," she said. "Why would anyone think that terrorists would come back to the White House when they'll be met by F-16s and AWACS."
Among residents whose policies were canceled recently is the Capitol Hill Baptist Church, which is five blocks from the Capitol at 525 A St. NE.
"They cut my workers' comp, commercial umbrella and the commercial package, which includes fire insurance," said Matt Schmucker, administrator and an elder in the church.
He was able to find a Midwestern company to replace the policy canceled by Graphic Arts Mutual Insurance Co. of Richmond, but not without feeling betrayed.
"There does seem to be something odd that we paid in over $200,000 in insurance over 10 years, never having made a claim, and when the risk jumps, our insurance is canceled with 90 days' notice," Mr. Schmucker said.
Graphic Arts Mutual was not immediately available for comment yesterday.
If the Department of Insurance and Securities Regulation survey shows "red-lining" is occurring in the District, Mrs. Norton said she would solicit support from other members of Congress for a bill to stop it. Red-lining refers to higher insurance rates within specific geographic areas.
"I would expect to have many allies from big cities and small towns that would be targeted for higher rates," she said. "Entire areas of our country could be subject to pretextual rate increases if we don't nip this in the bud."
Insurance companies are regulated by each state in which they operate. In the District, the Department of Insurance and Securities Regulation regulates the insurance industry.


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