Washington–An insurance trade group official said at a symposiumon terrorism last week that her industry will be hurt if theTerrorism Risk Insurance Act is not extended.
|"The U.S. economy will suffer if a federal public/privatepartnership to insure against catastrophic terrorist attacks is notin place to continue beyond Dec. 31, when the Terrorism RiskInsurance Act (TRIA) expires," said Debra Ballen, executive vicepresident of the Washington-based American InsuranceAssociation.
|Her comments came as a key Treasury Department report on TRIAwas expected to be released at any moment. The report mandated byCongress concerns whether the act, which provides a federalbackstop for foreign terrorism risk, has fulfilled itsfunction.
|The report must be released by Thursday but neither the WhiteHouse nor the Treasury Department has given any hints as to when itwill be made public.
|Congress is awaiting the report as a signal of whether the Bushadministration will support an extension, as the industry desires,and the shape and scope such an extension should take, if any.
|Ms. Ballen made her comments at a national symposium on thefuture of terrorism risk insurance sponsored by the RAND Corp. Thesymposium was held at the University of Southern California in LosAngeles.
|At the meeting, RAND officials released a report–"TerrorismInsurance and the Evolving Terrorist Threat"–which calls for anadequate public/private partnership to insure against terror, anational security issue because terrorists are likely to targetvital institutions in the U.S. economy.
|The report explained that insurance is needed to compensatevictims, sustain business operations during a disruption, andrebuild damaged assets and infrastructure.
|The RAND study presented at the symposium concluded that along-term solution to providing terrorism insurance in the UnitedStates must address chemical, biological, radiation and nuclear(CBRN) attacks as well as attacks by domestic groups.
|The report called for the extension of TRIA to protect againstdomestic attacks and said CBRN attacks pose "significantchallenges" for insurance and may be appropriately covered througha direct government program.
|Other suggestions included in the report called for thefollowing:
|o Considering mandatory requirements for companies that own oroperate systems vital to the functioning of U.S. criticalinfrastructure to carry adequate levels of insurance.
|o Conducting further research on the ability of insurance toprompt increased security in the private sector.
|o Establishing an oversight board to review TRIA or itssuccessor's performance and "ensure that it is robust to changes inthe underlying risk."
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