FEDS ISSUE REGS ON TRIA

The Alliance of American Insurers (AAI) said it is pleased with the U.S. Department of the Treasury’s initial set of regulations under the Terrorism Risk Insurance Act (TRIA) of 2002. AIA associate vice president of research, Roger Kenney, said while the proposed rules are just the beginning, they still “provide insurers with more certainty than they have had.” Kenney said the AIA is “pleased that in the definition of direct earned premium, Treasury has made it much clearer what constitutes commercial premium. The earlier definition seemed to imply that some personal lines premium would be considered commercial under TRIA, but that is no longer the case.” Treasury is soliciting comments in several areas, including comments on how the program should treat multiple controlling owners of an insurer, and how Treasury might prevent evasion of insurer deductible and other program requirements by certain newly-formed insurance companies. The proposed rule is reportedly consistent with the three interim guidance documents that were previously published. The Alliance expects subsequent regulations will soon follow, such as the disclosure requirements and the “make available” requirement, and on the treatment of state residual market entities and state workers compensation funds.