A group of business insurance policyholders took to Capitol Hill last week, urging Congress to move to reauthorize the legislation before it expires on December 31. Failing to reauthorize the act could threaten U.S. economic stability, according to the coalition.
Numerous associations and businesses with an interest in terrorism risk insurance coverage were on Capitol Hill last week urging Congress to approve a long-term reauthorization of the Terrorism Risk Insurance Act (TRIA) before it expires at the end of the year.
First passed in the aftermath of 9/11, TRIA provides a federal backstop for terrorism risk insurance coverage by allowing the government to cover insurance industry losses stemming from terrorist attacks. After the 9/11 attacks, for example, reinsurers and primary insurers paid out more than $30 billion in claims and then began withdrawing from the terrorism risk insurance market.
There is widespread agreement that the program is critical to U.S. economic stability and must be reauthorized.
The Coalition to Insure Against Terrorism (CIAT), whose members represent the transportation, real estate, manufacturing, construction, entertainment, and retail industries, argued that TRIA is still needed to protect the economy against unpredictable, catastrophic terrorist attacks.
“There is widespread agreement that the program is critical to U.S. economic stability and must be reauthorized,” CIAT spokesman Marty DePoy said in a statement. The group pointed to a new poll conducted on Election Day this year that found two-thirds of American voters support extending the act. CIAT also highlighted a recent Real Estate Roundtable survey that found 90 percent of U.S. businesses believe they would be adversely affected should TRIA not be renewed.
After 9/11, when some insurers began to exclude coverage for terrorism and those that continued to provide coverage did so at high rates, TRIA aimed to stabilize the market by putting in place the federal insurance program. It provides for government payments to policyholders after certain payouts are made by insurance companies. The arrangement includes at least partial repayment from insurers to the government over time, according to the coalition.
TRIA was reauthorized in 2005 and 2007, and while the Senate passed a bill this summer that would modernize and extend the act for seven years, the House has not acted.
“Time is running out,” coalition members said in a statement. ”CIAT members strongly urge congressional leaders to listen to the employers, security experts, economic analysts, and other experts who are underscoring how critical the program is to America’s economic stability and security. Congress must immediately come together to enact a long-term reauthorization of TRIA before it expires on December 31.”