WASHINGTON–The American Insurance Association and the Coalition to Insure Against Terrorism said they have established a united front in support of extending the federal Terrorism Risk Insurance Extension Act.

Their announcement came in advance of tomorrow's hearing by a House Financial Services Subcommittee examining the legislation that provides a backstop for major insurer terrorism losses prior to its scheduled expiration at the end of the year.

“We believe that consensus between two major stakeholders in the debate over how to structure renewal of TRIEA represents an important step forward, which will hopefully inform the discussion among policymakers,” said Martin DePoy, coordinator of CIAT's steering committee.

Among the priorities set by the two groups for legislation extending the program, according to AIA president Marc Racicot, are calls for the program to be permanent, elimination of the requirement that covered terrorist acts be conducted by a foreign entity, and that any extended program should include coverage for nuclear, biological, chemical and radiological attacks.

“These principles represent a set of parameters that we believe should be considered as part of any TRIEA extension bill,” he said.

The call for a permanent extension runs counter to comments that House Financial Services Committee Chairman Barney Frank, D-Mass., and Rep. Paul Kanjorski, D-Penn, the chair of the subcommittee holding Tuesday's hearing, have made in the past few months.

While both representatives have voiced support for an extension, they have consistently shied away from seeking to make the program permanent.

The views of the two groups track more closely with those expressed by committee leadership in the other congressional chamber. Sen. Chris Dodd, D-Conn., who chairs the Senate Banking Committee and is seeking the Democratic nomination for the 2008 presidential election, has strongly endorsed a permanent TRIA program.

He said in recent months that his committee would only consider legislation along those lines. Despite the difference in opinion, the leaders of both the House and Senate committees have said that the TRIA legislation is among their top priorities.

To address the NBCR issue, the two groups are calling for a mandatory “make available” provision that would operate along similar lines as the standard workers' compensation insurance model.

However, the two also stressed that legislation making use of this provision should also clearly acknowledge the federal government's obligation to cover losses beyond primary insurers' individual NBCR retention levels and to eliminate the co-payment requirement for NBCR losses.

“We are gratified by the broad-based, bi-partisan support Congress has shown for continuing the terrorism reinsurance backstop, but policyholders and insurers alike believe that new legislation should address some important issues that were not fully resolved by the Terrorism Risk Insurance Act and its extension,” said Mr. DePoy. “We believe the new program should end only when Congress determines terrorism no longer is a significant threat.”

Special Reports /

Two Groups Join To Seek Terror Cover Extension

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