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 add coverage of group life insurers.[@@]

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

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

According to officials at the Property Casualty Insurers Association of America, based in Des Plaines, Ill., the bill contains several improvements over the original legislation, including language that specifies that group life insurers will be covered to the same extent as property-casualty insurance writers.

The current law gives the authority to include group life insurers totally to the Treasury Department, which has refused to do so, citing reports that indicate this coverage is readily available.

Key improvements in the Bennett/Dodd bill are provisions calling for a so-called "soft landing," which means that the federal reinsurance coverage extends until the specific insurance contract runs out, and does not automatically expire on Dec. 31, 2007, when the program terminates.

The current bill expires Dec. 31, 2005, and under existing language all federal support would cease at that time, regardless of when a specific policy expires.

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

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

"This is an extremely positive development in the effort to extend TRIA and
protect Americans and the nation's economy from the devastating financial 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 measures introduced recently in the House, is a two-year extension of the economic safety net," he added. "The fact that senators on both sides of the aisle co-sponsored this proposal further drives home the point that TRIA is important to every business and consumer, and that partisan politics will not stand in the way of doing what's best for the country and its citizens."

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TRIA Bill May Include Group Life

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