Lawmakers Tell Brokers Class Action Will Pass But TRIA Renewal Far from Certain

By | February 10, 2005

A parade of Republican lawmakers in Washington told insurance brokers some but not all of what they wanted to hear today, promising that class action reform will soon pass and, they hope, create momentum for Congress to also address other tort reform issues.

At the same time, however, they indicated that Congress will not touch renewal of the Terror Risk Insurance Act until after a Treasury Department report is issued in June and even then renewal of the current program is not assured.

“Class action reform looks good,” Rep. Pete Sessions (R-Tex.) told members of The Council of Insurance Agents and Brokers at a legislative summit on Capitol Hill this morning. His prediction of passage was echoed by other speakers including Rep. Deborah Price (R-Ohio) and Rep. Richard Baker (R-La.) and U.S. Sen. Judd Gregg (R-N.H.).

Baker said the class action bill will be a “landmark” in its value to the industry and to bringing the “litigation-mad” system under some control.

The Senate is currently considering a measure which if it passes without amendment as expected will also win House approval, reported David Brog, chief of staff for Sen. Arlen Specter, who is chair of the Senate Judiciary Committee.

The measure under consideration would shift some class action suits from state to federal courts. More votes to block amendments are expected in the Senate today.

While Price and others indicated TRIA will not be revisited on Capitol Hill until after the June report from the Treasury Department, Baker suggested it may be an uphill battle to renew the current TRIA program even if that report recommends it.

Baker said that he and others in Washington’s leadership question whether the government should “advance capital to an industry that may not need it.” He said that there is reluctance to giving taxpayer dollars to insurance companies that later show billions in profits unless there is some way for the government to recoup its funds later on.

He said lawmakers want to “protect government shareholders monies from going to insurance company shareholders” without at least having some way of getting back the funds after a terrorist attack and the insurers are again on solid financial footing.

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