Early reaction from Republicans on Capitol Hill suggests they are likely to go along with Treasury Secretay John Snow’s recommendations and not renew the federal terrorism insurance program in its current form.
House Financial Services Committee Chairman Michael G. Oxley (OH), reacting to this week’s Treasury Department report that is critical of renewing the Terror Risk Insurance Act of 2002 in its current form, said he thinks Congress will address the terrorism risk insurance issue by the end of the year.
He said the Treasury report raises serious concerns that TRIA may actually be inhibiting the development of a long-term private insurance marketplace and that consumer needs are still not being met in all areas. “As a result, a simple extension of the program is not in the best interest of American consumers or the economy,” he stated.
“I am confident that we can achieve a comprehensive, fiscally responsible solution to deal with terrorism insurance by the end of this year,” Oxley said.
Oxley reads the Treasury report as calling for a targeted role for the federal government. “I am pleased that the Department and the Administration recognize that any role the federal government is to play must be better tailored to ensure the availability of adequate levels of terrorism insurance,” he commented.
He said any revamped terrorism insurance program must encourage greater private-sector involvement and must improve the insurance marketplace. It should include full payback of claims, narrowed taxpayer exposure to insurance risk, narrowed federal involvement in order to allow development of the private market, and private sector layers of coverage, according to the key lawmaker.
House Speaker Dennis Hastert (R-Ill.) also recommended that TRIA not be extended in its current form.
“Congress needs to review the program, in light of Treasury’s report which suggests that any continuation of the program needs to incorporate more market-based solutions, which would shield the taxpayer from unfair exposure. Additionally, the report notes that the current program can be twisted to allow some to exploit the litigation system and redirect money from policy holders, to non-injured lawyers,” Hastert said.
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