TRIA Bill May Include Group Life

By Arthur D. Postal, Washington Bureau Chief

NU Online News Service, July 22, 3:57 p.m. EDT,Washington?Senate legislation, due for introduction today,to extend the federal terrorism reinsurance program, would addcoverage of group life insurers.[@@]

The bill is being drafted by staff members for Sens. RobertBennett, R-Utah, and Chris Dodd, D-Conn. Sen. Dodd and his staffnegotiated far into the night directly with the White House inNovember 2002, leading to the enactment of the current bill?theTerrorism Risk Insurance Act.

Sens. Charles Schumer, D-N.Y., Saxby Chambliss, R-Ga., and JimBunning, R-Ky., are also providing strong support for the bill.

According to officials at the Property Casualty InsurersAssociation of America, based in Des Plaines, Ill., the billcontains several improvements over the original legislation,including language that specifies that group life insurers will becovered to the same extent as property-casualty insurancewriters.

The current law gives the authority to include group lifeinsurers totally to the Treasury Department, which has refused todo so, citing reports that indicate this coverage is readilyavailable.

Key improvements in the Bennett/Dodd bill are provisions callingfor a so-called "soft landing," which means that the federalreinsurance coverage extends until the specific insurance contractruns out, and does not automatically expire on Dec. 31, 2007, whenthe program terminates.

The current bill expires Dec. 31, 2005, and under existinglanguage all federal support would cease at that time, regardlessof when a specific policy expires.

"The ?soft landing' provision is a key factor for both insurersand consumers," said Joseph Annotti, a PCI spokesman.

The bill would also keep the company loss deductible at 15percent?the rate that the deductible rises to in 2005, the thirdyear of the TRIA program. Legislation introduced by HouseRepublicans a month ago raises the threshold to 20 percent in theout-years, something the industry believes is inappropriate.

"This is an extremely positive development in the effort toextend TRIA and
protect Americans and the nation's economy from the devastatingfinancial impact of future terrorist attacks," said Carl Parks,senior vice president of federal government relations for PCI.

"The cornerstone of the Senate bill, like the two measuresintroduced recently in the House, is a two-year extension of theeconomic safety net," he added. "The fact that senators on bothsides of the aisle co-sponsored this proposal further drives homethe point that TRIA is important to every business and consumer,and that partisan politics will not stand in the way of doingwhat's best for the country and its citizens."