The House of Representatives has introduced legislation that would extend the Terrorism Risk Insurance Act (TRIA), which is set to expire at the end of 2005.
The proposal, H.R. 1153, would keep a federal terrorism reinsurance backstop in place while long-term solutions to the many financial challenges associated with catastrophic terror attacks are forged.
The Independent Insurance Agents & Brokers of America, the nation’s largest agents and brokers group, announced that it is pleased to see the introduction of new legislation.
“The introduction of this legislation, H.R. 1153, late yesterday in the House is a positive sign of continued support in Congress for a terrorism insurance backstop, and we will continue to advocate for an appropriate terrorism program to ensure availability of insurance coverage for consumers,” said Charles E. Symington, Jr., Big “I” senior vice president of federal government affairs.
Insurers were also pleased with the terrorism insurance proposal.
“Policyholders, insurers and many on Capitol Hill know that we need something after Dec. 31—the end date for the Terrorism Risk Insurance Act of 2002 (TRIA),” said Leigh Ann Pusey, AIA’s senior vice president of government affairs. “This momentum toward the commonly held goal of providing for a federal terrorism risk insurance program is welcome.”
Industry groups have strongly supported the extension of terrorism insurance legislation for two years through the end of 2007, and requiring terrorism insurance coverage to be made available. The existing TRIA legislation expires Dec. 31, 2005, but insurers and agents alike say action is needed as soon as possible to avoid coverage gaps in policies extending into 2006.
“Catastrophic losses related to terrorist attacks continue to appear uninsurable, and we do not believe a federal terrorism backstop should be allowed to lapse,” Symington said. “Should the program lapse, it could be difficult, if not impossible, for businesses to obtain insurance against losses related to terrorist acts, and that could have serious economic consequences in the event of another terrorist attack on American soil.”
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