While everyone is focused on what's happening to the insurance giant AIG, the government put out a report yesterday on one type of insurance that was functioning OK (at least at the time of writing.) Insurance against a terrorist attack.

The Government Accountability Office reports "Many industry participants and policyholders said that terrorism insurance currently is available nationwide at prices viewed as reasonable."

Interesting to note that the government is helping prop all this up. If losses exceed $100 million,
the feds will reimburse insurers for up to 85% of losses. The government can't lose infinite money on this though. Payouts stop after $100 billion.

Interesting material on this strange corner of the insurance business from Council on Foreign Relations here.