Quake Authority Says Reinsurance Secured
The California Earthquake Authority said it’s protected at least until the end of next year from any damage to the reinsurance industry after the terror attacks that toppled the World Trade Center.
The earthquake authority, a privately funded, publicly managed agency that provides earthquake insurance to homeowners, had secured $1.97 billion in reinsurance contracts through December 2002 before the attacks Sept. 11. The insurance industry expects claims from the attack to top $40 billion, and analysts have said some reinsurers may not be able to cover the costs.
“We are aggressively monitoring the situation in order to protect out policyholders,” said Stan Devereux, spokesman for the authority. “So far we have not received any information that would lead us to believe that reinsurance companies would be unable to fulfill their obligations to CEA policyholders.”
The earthquake authority was formed in 1996 with $700 million in seed money from the insurance industry, including Warren Buffett’s Berkshire Hathaway Inc. It operates on premiums from policyholders, contributions from insurance companies, borrowed money, reinsurance and investment income.
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