TRIA Reauthorization Moves Forward in House
WASHINGTON, June 20, 2014 /PRNewswire-USNewswire/ -- Legislation approved 32-27 today by the House Financial Services Committee to reauthorize the risk-spreading mechanism established by the Terrorism Risk Insurance Act represents an important step forward, but several provisions continue to cause concern for the industry, the National Association of Mutual Insurance Companies said.
"At the beginning of this Congress, the question being asked was whether this program should even be reauthorized," said Jimi Grande, senior vice president of federal and political affairs at NAMIC. "Today's favorable vote on a five-year TRIA reauthorization bill shows just how far we have come."
Under the House bill, the TRIA program is reauthorized for five years, the insurer co-pay rises to 20 percent, and a new program bifurcation is established for nuclear, biological, chemical, or radiological attacks. This legislation also increases the program's trigger from $100 million to $500 million for non-NBCR events.
"We are appreciative of the committee's willingness to work with stakeholders to reauthorize a program that is essential for protecting the U.S. economy from the potentially devastating effects of a catastrophic terrorist attack," Grande said. "However, NAMIC has serious concerns about some of the provisions in the House bill that, if not addressed, could severely curtail some companies' access to the program and significantly disrupt the currently competitive marketplace for terrorism insurance coverage."
The House bill, according to Grande, dramatically increases the program trigger for non-NBCR events. "It has been suggested that this will further protect taxpayers and maximize private-sector capital in the market for terrorism insurance, however, this is simply not the case," he said. "The result would be reduced competition and a greater concentration of risk as small- and medium-sized regional or single-state insurers are driven out of the terrorism insurance market."
Established in the aftermath of the 9/11 terrorist attacks, the TRIA program creates economic certainty allowing insurers to provide terrorism coverage by enabling the federal government to provide relief in the form of a financial liquidity mechanism to help pay claims resulting from a catastrophic event, which would be repaid with interest over time.
Lisa Floreancig
Public Affairs Director, State & Policy Affairs
[email protected]
317.875.5250
SOURCE National Association of Mutual Insurance Companies
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