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CNN Saturday Morning News

Attacks to Cost Insurance More Than Companies $20 Billion

Aired September 22, 2001 - 09:37   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: The early estimates of losses from the attacks almost unbelievable. Joining us now to talk about insurance losses, Kathleen Sebelius. She's the insurance commissioner in the state of Kansas and also president of the National Association of Insurance Commissioners.

Kathleen, good morning. How'd I do on your name?

KATHLEEN SEBELIUS, NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS: You did well, Bill, good morning.

HEMMER: OK, good morning. And thank you for being with us.

Do you have a grasp just yet about the total cost that we're looking at here in terms of dollars?

SEBELIUS: Well, we think at this point we're looking at about $20 billion in insured losses, a huge amount of money. And it could go higher. At this point, that's what the loss looks like.

But to put that in a little perspective, that's about less than 1 percent of the assets currently held by insurance companies, which amount to at this point almost $3 trillion. So even though the loss is huge and the loss of life is unprecedented, we are confident that companies can step up to the plate and pay the claims.

HEMMER: So at this point, Kathleen, you don't believe that, given the enormous costs and the number you just gave us, that the insurance companies will not be able to cover their expenses.

SEBELIUS: Well, as regulators, we watch the money closely, and we are confident that the companies involved -- and there are probably 55 companies plus some reinsurance companies in Europe, who will have the brunt of these claims payments. But we think the money is in hand and they can pay the claims.

And then there's a safety net system, a guarantee system if a company were to become insolvent. But at this point, we think the assets are there, and claims can be expedited. And hopefully people can get on with their lives.

HEMMER: And Kathleen, there are so many extraordinary cases here. If you heard the story from Brian Palmer before we started talking here... SEBELIUS: Yes.

HEMMER: ... what are insurance companies saying and indicating, given the extreme circumstances? Do they need a death certificate? Are there other factors that have to be considered?

SEBELIUS: Well, regulators are working in an expedited fashion on a lot of those issues. We think we have an affidavit that's close to being ready to sign off on which could expedite claims payment without a death certificate. And unfortunately, in many cases, without a body.

We want to make sure that companies don't dun people because they didn't receive their notices on time, or they didn't make their claims in a timely fashion. So those are situations which right now are under way, and we hope within a week or so that precedent will be in place and claims can be paid in a timely fashion.

HEMMER: Kathleen, while we have you here, give us the best advice for those who may be affected. What can they do if they have questions at this point?

SEBELIUS: Well, certainly calling their state insurance department, there are trained claims representatives ready to go. The New York department is back in their office space. They are ready to go. We're going to set up a national help center so there could be claims help from all over the country.

But call the insurance department, let a regulator intervene in your behalf with the company and get the claim expedited. And get on with rebuilding lives and businesses.

HEMMER: Kathleen, thanks. Kathleen Sebelius, live with us this morning. Much appreciated.

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