The head of the Insurance Information Institute says in the wake of the bombing tragedy at the Boston Marathon that the stability of the terrorism risk insurance market is contingent on sustaining a federal terrorism risk insurance backstop.

In most cases, out of concern the current focus should be on the people and communities impacted by the attack, industry officials are being cautious about commenting about the impact the bombing in Boston could have on its push for reauthorization of the Terrorism Risk Insurance Act (TRIA)–one of the industry's top priorities this year.

Robert Hartwig, president of I.I.I., who was standing about 100 feet from one of the bomb sites watching his son finish the marathon (he luckily left more than a hour before the blast), says the first successful terror attack in the U.S. since 9/11 and TRIA's scheduled expiration at the end of 2014 will prompt federal lawmakers to assess whether terrorism risk now, or ever, will be a risk that can be managed entirely within the private sector.

“The evidence, both in the United States and from similar programs abroad, is that market stability in terms of both pricing and availability of terrorism coverage, as well as the ability to maintain adequate and expanding levels of capacity over time, are contingent on the continued existence of a federal terrorism risk insurance program,” Hartwig says.

The insurance industry is pushing to have legislation creating the backstop, now known as the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) after its first renewal in 2007, renewed in its current form. H.R. 508, legislation renewing the program through 2019, was introduced in February.

The chief sponsor of the legislation is Rep. Michael Grimm (R-N.Y.) Interestingly, the only committee chairman named as a co-sponsor was Rep. Pete Sessions (R-Texas), chairman of the House Rules Committee.

Jimi Grande, senior vice president of federal and political affairs at the National Association of Mutual Insurance Companies, says NAMIC had been calling for an extension to the TRIA program before the tragic events in Boston, and we will continue to press lawmakers to act as swiftly as possible, but he adds, at this time “the focus of the government's efforts should be on helping the victims and pursuing those who perpetrated this heinous act.”

“When we return to the debate over TRIA, with a sad reminder that the threat of terrorism has never left us, NAMIC will continue to make the same arguments we've made all along–that TRIA is a vital part of our nation's economic defense; that terrorism is a unique risk whose very nature makes it impossible for insurers to cover against major events; and that the information needed to even begin to price coverage is rightly kept classified as a matter of national security.”

Ken A. Crerar, president and CEO of The Council of Insurance Agents & Brokers, says, “In the coming days, weeks and months ahead, this senseless tragedy will be invoked as a part of the debates on all facets of terrorism–intelligence, readiness, and, yes, financial security.”

Willem O. Rijksen, vice president of public affairs for the American Insurance Association, added that, “Our thoughts and prayers are with the victims and people of Boston. Most unfortunately, this tragedy reminds us all of the continued threat posed by terrorist attacks.”

In recent comments at the National Association of Insurance Commissioners meeting in Houston, Robert Gordon, senior vice president of policy development and research for the Property Casualty Insurers Association of America, says that while reauthorization is likely to receive strong support in Congress, success may come late in the process.

Additionally, Gordon also said terrorism is a national security issue of concern to all citizens. In remarks made more relevant in the wake of the Boston event, Gordon said, “Terrorism plots have been attempted all across the nation in almost all regions. Remember that the second largest successful terrorist attack in the United States was in Oklahoma City.”

In a statement today on the Boston bombing, Nat Wienecke, PCI's senior vice president of federal government relations, says ”Our thoughts and prayers are with all those impacted by the tragic events in Boston. There will be a time and place for policy debates on the Terrorism Risk Insurance Act, but today we are focused on helping the people of Boston and the marathon participants.”

Special Reports /

Industry Sees Boston's Importance for TRIA; Focus Now on Justice, Recovery

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