Both the Property Casualty Insurers Association of America (PCI) and the National Association of Mutual Insurance Companies (NAMIC) praised the House Financial Services Committee’s passage of H.R. 4634, the Terrorism Insurance Backstop Extension Act yesterday.
The bill will extend the Terrorism Risk Insurance Act (TRIA) for two years until Dec. 31, 2007. TRIA, enacted in response to the Sept. 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. Without new legislation such as H.R. 4634, the program and the backstop are set to expire Dec. 31, 2005.
“With policy expirations occurring now through the end of this year, it is absolutely essential that the federal backstop provided by TRIA be continued because policies taking effect on Jan. 1, 2005, will extend beyond the scheduled sunset of Dec. 31, 2005,” said David A. Winston, NAMIC federal affairs senior vice president. “NAMIC appreciates the outstanding leadership of Committee Chairman Michael G. Oxley, R, Ohio, to extend TRIA for two years,” said Winston.
Property Casualty Insurers Association of America (PCI) Senior Vice President, Government Relations Carl Parks today released the following statement regarding the House Financial Services Committee’s passage of H.R. 4634, a bill that would extend the Terrorism Risk Insurance Act of 2002 (TRIA) through December 31, 2007:
“PCI commends the Financial Services Committee for its passage of H.R. 4634, legislation that would extend the Terrorism Risk Insurance Act for two more years. Few legislative efforts before Congress this year are more important to American workers and the American economy,” said PCI Senior Vice President, Government Relations Carl Parks.
The bill was introduced in June by Reps. Pete Sessions (R-Texas), Richard H. Baker (R-La.), Sue Kelly (R-N.Y.), Eric Cantor, (R-Va.), and Deborah Pryce (R-Ohio), and currently has 91 co-sponsors. It is expected that the House will take up H.R. 4634 before it adjourns for the November elections.
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.
“PCI and its member companies will continue the effort to move a TRIA extension through the Senate and House of Representatives this year. There is still a great deal of work to do, but the case for a TRIA extension is clear, ” Parks said.
“So many critical economic decisions depend on the availability of terrorism coverage, making the TRIA extension imperative to avoid marketplace instability,” Winston said. “NAMIC’s TRIA Working Group will continue to meet, beyond passing this legislation, to ensure that there is certainty in the marketplace.”
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