WASHINGTON–Property-casualty insurance industry trade groups voiced general support today for legislation continuing government support for insurers in the event of a terrorist attack–a measure the Senate Banking Committee is expected to approve tomorrow.

Joel Wood, senior vice president for government affairs at the Council of Insurance Agents and Brokers, in a note to CIAB members wrote that “although much uncertainty remains,” a Senate compromise reached last week on the legislation extending the Terrorism Risk Insurance Act for seven years “does significantly move the ball down the field.”

“I believe in the end, the process may be tortured, but the results should be satisfactory to all of us who want to assure that corporate clients have access to available and affordable protection against the financial risks of terrorism,” Mr. Wood added.

The current TRIA measure, which had only a two-year life, expires Dec. 31.

Besides the length of the program, one of the few major changes from the current legislation addressed in the Senate bill is the elimination of the distinction between domestic and foreign terrorism.

At the same time, the issue of coverage for nuclear, biological, chemical and radiation events remains a dividing line within the industry.

And a lobbyist for the National Association of Mutual Insurance Companies said the group will work to reduce the “trigger” for federal participation from the current $100 million–as maintained in the Senate bill–to the $50 million called for in the House bill.

The provision is an important component of counterpart House legislation but was left out of the bare-bones compromise bill negotiated by Sen. Chris Dodd, D-Conn., chairman of the committee, and Sen. Richard Shelby, R-Ala., ranking minority member. The House bill requires all insurers participating in the program to “make-available” NBCR coverage.

An NAMIC official called the compromise a “victory” on the NBCR issue.

“We applaud the committee for eliminating the NBCR make-available provision and consider this an enormous victory,” said Marliss Browder, a senior federal affairs director at NAMIC.

The Property Casualty Insurers Association of America supported NAMIC on this issue.

“We would be very pleased if the Senate deliberations ultimately produce a TRIA bill without a mandatory NBCR offer,” said Cliston Brown, a staff official.

But the American Insurance Association, which supported including NBCR in the House bill, was more measured in its response.

Dennis Kelly, a spokesman, said that “seven years is a positive because it provides more stability in the market than we have had with two-year extensions.”

As for NBCR, he said, “Policyholders are going to have to make it clear to Capitol Hill that they are the ones who do not have the coverage.”

Mr. Kelly added that a provision of the Senate bill calling for a study of all issues related to TRIA insurance “gives us an opportunity to revisit the issue.”

Martin DePoy, chairman of the steering committee for the Coalition to Insure Against Terrorism, lauded the provision extending the program for seven years. “It provides certainty to businesses in the decisions they make on a daily basis,” Mr. DePoy said. “This is certainly a positive, and we are pleased that the Senate Banking Committee is handling this in an expeditious and bipartisan fashion.”

Eliminating the distinction between foreign and domestic terrorism was also noted by Mr. DePoy. “The black and white distinction some had believed existed between domestic and foreign terrorism no longer applies,” he said. “Terrorism is terrorism.”

He also said that CIAT will work to win support for inclusion of an NBCR provision in a final bill. “Clearly, there is little debate that NBCR insurance is unavailable. Studies confirm what we have been saying all along, that there is no market out there for NBCR coverage.

“We are certainly hopeful that before a bill is finally passed, NBCR will be dealt with in some fashion,” Mr. DePoy said.

Special Reports /

Insurers Look For Senate Panel TRIA Approval

Related Stories

Recommended For You