An article published by Standard Poor’s Ratings Services stated that if Congress fails to renew or extend the Terrorism Risk Insurance Act (TRIA), the commercial lines property/casualty insurance sector will be placed on negative outlook.
According to the report, titled, “Whether TRIA Sinks Or Swims, Commercial Insurers Will Feel Impact,” this means that over the next six months, the number of downgrades in this sector could exceed the number of upgrades. Even if the Act is renewed or extended, a negative outlook for the commercial sector could result, if coverage provided is so diluted that it would effectively remove any beneficial effect.
“Whether TRIA is allowed to expire, or is renewed or extended, Standard & Poor’s plans to carefully review the companies we rate, both quantitatively and qualitatively, to determine their exposure to terrorism risk and the impact of that exposure,” said Standard & Poor’s Managing Director Thomas Upton.
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