New legislation authored by several House Democrats to extend the Terrorism Risk Insurance Act of 2002 (TRIA) demonstrates strong, bipartisan congressional support for keeping TRIA’s temporary, yet vital, economic safety net fully in place while long-term solutions are being evaluated, the American Insurance Association (AIA) said Thursday.
TRIA secures virtually every sector of the U.S. economy against catastrophic terrorist attacks by making sure that businesses of all sizes and types can purchase commercial insurance that covers losses resulting from terrorist attacks.
“Momentum is building on both sides of the political aisle and on both sides of Capitol Hill to extend TRIA this year,” Leigh Ann Pusey, AIA’s senior vice president of government affairs, said. “The House majority’s ‘Terrorism Insurance Backstop Extension Act of 2004′ (HR 4634) and the Democrats’ bill (HR 4772) clearly show that members of Congress want to devote significant energy to this issue this year.”
According to AIA, TRIA is a three-year, public-private risk sharing mechanism that has worked well, enabling the commercial insurance marketplace to function even though the very real threat of further catastrophic terrorism remains. Commercial insurance policyholders from a wide variety of economic sectors, along with insurance regulators and insurers have been actively advocating a decision this year to extend the program for two years. Both bills introduced in the House would accomplish that task, though the bills differ on some details.
AIA said action in 2004 is crucial in light of the U.S. Treasury’s decision last month to extend the “make available” provisions of TRIA for all policies written during 2005. Treasury’s move means a potential mismatch between insurance policy periods and TRIA’s Dec. 31, 2005 expiration date. That potential has reportedly led insurance consumers, regulators and insurance companies to push for Congressional action this year.
“We will continue to work with congressional leadership to help forge bipartisan legislation that extends TRIA and keeps this important economic safety net from fraying,” Pusey added.