WASHINGTON (June 22, 2004)—At a press conference today, four members of the House of Representatives introduced a bill extending the Terrorism Risk Insurance Act (TRIA).
“NAMIC appreciates the outstanding leadership of Rep. Pete Sessions, R-Texas, Financial Services Committee Insurance Subcommittee Chairman Richard Baker, R-La., Oversight and Investigations Committee Chair Sue Kelly, R-N.Y., and Chief Deputy Majority Whip Eric Cantor, R-Va., in introducing legislation to extend TRIA for two years beyond its scheduled sunset on Dec. 31, 2005,” said David A. Winston, NAMIC senior vice president--federal affairs.
TRIA, enacted in response to the 9/11 terrorist attacks, ordered that insurers offer terrorism coverage while creating a federal backstop for huge losses. Lawmakers envisioned it only as a temporary measure until insurers could assess the market. The program and the backstop are set to expire Dec. 31, 2005.
“With policy expirations occurring later this year, it is absolutely essential that the federal backstop provided by TRIA be continued,” said Winston. “So many critical economic decisions depend on the availability of terrorism coverage, making the TRIA extension imperative to avoid marketplace instability.”
“The two-year extension will permit Congress to assess alternatives to protecting the economy from future terrorist attacks,” said Winston.
At present, there is no private market alternative to TRIA as terrorism coverage remains an uninsurable risk. The underwriting criteria for such coverage is highly sensitive classified information within the sole possession of the U.S. Government. Further, there has been no claims experience outside of the tragic events of 9/11.
Posted: Tuesday, June 22, 2004 12:00:00 AM. Modified: Tuesday, June 22, 2004 2:47:07 PM.
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