The introduction of a bipartisan Senate bill to extend the Terrorism Risk Insurance Act (TRIA) for two years is encouraging news and demonstrates the widespread understanding among members of Congress that the economic safety net for terrorism losses must remain in place, stated the Property Casualty Insurers Association of America (PCI) in a written statement.
The insurance company trade group applauded Sens. Chris Dodd (D-Conn.) and Bob Bennett (R-Utah) for their recognition of the urgency of TRIA extension in 2004 and for the introduction of the Terrorism Risk Insurance Extension Act of 2004. The legislation would extend TRIA through 2007, to help ensure the security of the American economy in the event of a catastrophic terrorist attack.
“We are pleased that the Senate has recognized the importance of taking action to extend TRIA this year,” said Carl Parks, senior vice president of federal government relations for PCI. “This is must-do legislation that affects virtually all sectors of the American economy, and PCI is ready to work with the Senate to move legislation forward this year. The cornerstone of the Senate bill – like the two measures introduced recently in the House – is a two-year extension of this program critical to the nation’s economic security. The fact that Senators on both sides of the aisle co-sponsored this proposal further drives home the point that the nation needs this tool to remain in place while we continue to fight the war on terrorism.”
TRIA is set to expire on Dec. 31, 2005. A broad coalition of terrorism insurance customers and the insurance industry are urging Congress to act on an extension this year to maintain stability in the market and ensure that terrorism coverage remains available to American businesses. Without congressional action in 2004, policyholders will be subject to a lapse in coverage at the expiration of the current terrorism reinsurance program. The longer it takes to extend the program, the more exposure businesses will have to uninsured terrorism losses.
“December 2005 may seem like a long way off, but it’s not considering that there are only about 30 working days left in the current session of Congress,” Parks said. “More importantly, many businesses are already beginning to negotiate policy renewals for 2005. Without congressional action in 2004, new and renewal policies written after Jan. 1, 2005 will lose TRIA’s protections for the portion of the coverage that extends into 2006.”
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