U.S. Senators Robert Bennett (R-Utah) and Christopher Dodd (D-Conn.) reintroduced legislation today to extend the federal terrorism backstop for two more years. The current Terrorism Risk Insurance Act is set to expire on Dec. 31, 2005.
The Dodd-Bennett bill would also establish a commission to come up with suggestions for how to handle the risk of terrorism long term .
TRIA is a program that helps insurance companies provide coverage for losses from terrorist attacks.
The same two senators introduced an extension measure in 2004 but it never was voted on.
The measure was unveiled with 14 bipartisan co-sponsors, including Sens. Christopher Dodd (D-Conn.), Robert Bennett (R-Utah), Charles Schumer (D-N.Y.), Chuck Hagel (R-Neb.), Jon Corzine (D-N.J.), Jim Bunning (R-Ky.), Jack Reed (D-R.I.), Richard Lugar (R-Ind.), Hillary Clinton (D-N.Y.), Ben Nelson (D-Neb.), Elizabeth Dole (R-N.C.), Thomas Carper (D-Del.), Saxby Chambliss (R-Ga.) and Frank Lautenberg (D-N.J.).
Just yesterday, Federal Reserve Chairman Alan Greenspan told members of Congress he is not persuaded that the private market alone can work well enough to insure against the continuing threat of terrorist attacks. Top intelligence and military officials from the Administration report that terrorists are regrouping and planning possible new attacks against the United States.
The American Insurance Association hailed the introduction of the bill. “Congress must act quickly before TRIA expires. The threat of terrorism still looms,” Leigh Ann Pusey, senior vice president of government affairs for the American Insurance Association (AIA).
According to AIA, the bill would establish a public/private partnership/commission to take up the challenge of constructing a transitional terrorism backstop mechanism after TRIA ends. “Insurers and other stakeholders have been undergoing an intensive process to explore longer-term options, something we all know is a vitally important goal,” Pusey noted.
A major concern is that new annual insurance policies are already being written that extend past Dec. 31, 2005.
Real estate interests also said they back the extension of TRIA.
The Real Estate Roundtable, a Washington-based policy group, said it was pleased with the Dodd-Bennet bill. “Although TRIA was originally intended as a temporary program, the private markets are simply not in a position to provide the terrorism insurance coverage our economy needs,” Roundtable President and CEO Jeffrey D. DeBoer said.
DeBoer said a TRIA extension will help ensure that businesses — including real estate firms, utilities, food marketers, museums, railroads and others — can continue to obtain the terrorism coverage they need. Adding urgency to this matter, many insurers have already begun informing policyholders they will not be covered against terrorism-related losses beyond TRIA’s scheduled expiration at year-end, according to DeBoer.
“Governments around the world have recognized that the threat of terrorism requires unusual market intervention to keep economies from freezing up,” DeBoer continued. “Congress must act now to ensure that Americans do not face future gaps in terrorism coverage — gaps that would increase economic uncertainty and lead to fewer jobs.”
“The economic stakes for American workers and businesses are simply too high for Congress not to act quickly,” AIA’s Pusey said. “We will continue engaging members of Congress and the Administration to identify long-term solutions that will work.”
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