Much of the financial cost from the 9/11 attacks fell on reinsurers (that further spread the risk assumed by primary insurers).

Without reinsurance, primary insurers were then compelled to exclude terrorism.

Most state insurance regulators approved terrorism exclusions for use by primary insurers.

Several major reinsurers, who share risks with primary insurers, also issued higher-than-expected estimates of their expected losses from the attack today.

Free of regulation, reinsurers can raise their premiums at once, unlike primary insurers, which must seek state regulatory approval.

Reinsurers usually have a limit or "catastrophe cover" on their policies with primary insurers.

After the double whammy, primary insurers will undoubtedly lay off more risk than they had been, generating further business for reinsurers.

"We are the primary insurer of small businesses," he said.

Under that law, people eligible both for Medicare and for private insurance through an employer can designate the private company as their primary insurer.

And primary insurers may lay off a larger proportion of risks on the reinsurers, raising their revenues.