Claims News Service, Oct. 20, 4:50 p.m. EDT — (MARKET WIRE) — A governmental-private sector partnership reinsurance facility to provide a long-term replacement for the federal Terrorism Risk Insurance Act, which expires at the end of this year, has been proposed by The U.S. RE Group, Tal P. Piccione, Chairman/CEO, announced.

"We met with senior executives of the American Insurance Association and plan to meet with other associations and industry leaders over the foreseeable future," Piccione said. "We are finding a receptive attitude toward achieving an industry-government partnership. Financing the coverage requires a government backstop because it is impossible to predict the frequency and severity of potential terrorism events," he explained.

The Terrorism Risk Reinsurance Facility (TRRF) proposed by U.S. RE would be a tax-exempt, quasi-governmental entity to pay terrorism losses in excess of individual company retentions for all commercial lines up to a maximum industry loss of $45 billion in any year. Industry retentions would be pegged at 15 percent of prior year commercial premiums, or about $30 billion. This would provide up to an estimated $75 billion of terrorism coverage per year.