With the flood insurance-legislation rerun now in the rearviewmirror, the companies which provide the goods and services that arean essential part of our everyday lives are doubling down on theireffort to persuade Congress to reauthorize terrorism-risklegislation as soon as possible.

“There is growing anxiety amongst our members; they are hopingthat this will get done soon,” acknowledges Martin DePoy,spokesperson for the Coalition to Insure Against Terrorism(CIAT).

“The reality is that our members are hearing the word 'springingexclusions' too often as they work with insurers to renew expiringcommercial property and casualty insurance policies,” DePoy says.That is,language in new policies that gives insurers the right toexclude losses from terrorism events if the program is not renewedby Congress, or there are extensive changes made to theprogram.

CIAT represents a broad spectrum of companies and their tradegroups involved in U.S. commerce, including those in real estate,hospitality, electrical utility companies, retailers, railroads,trucking firms and a host of sports-entertainment entities such asNASCAR, the NFL, the NHL and Major League Baseball.

DePoy says with the current version of Terrorism Risk InsuranceAct (TRIA) scheduled to sunset Dec. 31, CIAT started working assoon as the current Congress convened last year to educate membersabout the importance of TRIA and the need to renew it as quickly aspossible. He says all allied industries, insurers and riskmanagers, did so because they were aware there had been hugeturnover in Congress over the last several years, and that manymembers were not around when the debate that resulted in enactmentof the current bill in 2007 took place.

“We have been working on educating members about this issue thissince the current Congress started last January,” DePoy says. But,obviously, budget discussions, healthcare and other issues tookpriority. “And then flood obviously intervened on the discussion,”DePoy says. “But, with that behind us, we are optimistic thatCongress is now ready to focus on it.”

He says that Senate Banking Committee members have indicated itis crafting legislation that could result in a discussion draftbeing released within the next several weeks, and officials of theHouse Financial Services Committee have indicated they will take upthe issue in late April.

“The strongest argument we are making is that the TRIA programhas worked,” DePoy says.

DePoy adds CIAT officials and members are telling Congress TRIA“plays an important role in homeland security.” He says al Qaeda“has committed itself to disrupting commerce through terroristattacks,” but TRIA defends against that “by putting in place anorderly mechanism for processing claims in the event of a terroristattack, thereby limiting the fallout from that attack.”

He also notes that there are a number of retention programsincluded in the existing TRIA program that limit exposure oftaxpayer to terrorism losses, therefore insulating taxpayers fromlosses related to this program. Additionally, he says becausetake-up rates for terrorism risk insurance has risen, the cost ofthis insurance has come down.

At the same time, CIAT members are “much more concerned aboutavailability than the cost of terrorism risk insurance. Weunderstand this is costly, but we look at this from the prism ofavailability,” he says.

NAIC wants FSB representation

The National Association of Insurance Commissioners wants tohave a voice within the Financial Stability Board, an internationalgroup that seeks to promote creation of uniformregulatory-oversight policies for financial firms.

Currently, only the Federal Reserve Board, the Securities andExchange Commission and the Treasury Department represent the U.S.on the FSB.

The NAIC's views were voiced in a letter to those agenciessigned by Adam Hamm, NAIC president and North Dakota insurancecommissioner.

Hamm says because the FSB is increasingly driving internationalstandard-setting beyond its primary focus on financial stability,its work has the potential to impact the U.S. insurance sector.

Hamm notes the NAIC is seeking “to strengthen U.S.participation” in the FSB by “directly providing our insuranceexpertise and regulatory perspective to these important discussionsthat will have import for the companies we regulate.”

Hamm says to illustrate the far-reaching implications of FSBdiscussions as they relate to regulated companies, the U.S.insurance market represents one third of the total insurance marketworldwide.

“If FSB proposals are to be relevant and considered forintegration into the U.S. regulatory regime where appropriate, thenU.S. participation in FSB discussions should reflect our uniqueregulatory structure and not be hampered by arbitrary limitationsand seat assignments that place the U.S. at a disadvantage relativeto more consolidated regulatory regimes,” Hamm says.

The letter also points to examples of FSB working groups thatdirectly impact insurance regulation, such as the StandingCommittee on Supervisory and Regulatory Cooperation, which dealswith systemic risk and group supervision issues, and the InsuranceCross Border Crisis Management Group under the Resolution SteeringGroup.

The FSB was established to coordinate the work of nationalfinancial authorities and international standard setting bodies andto develop and promote the implementation of effective regulatory,supervisory and other financial sector policies.

The FSB is now headed by Mark Carney, governor of the Bank ofEngland, and is headquartered in Basle, Switzerland, at the officesof the Bank for International Settlements.

Besides central bankers and government agencies, its membersinclude money center financial institutions, sector-specificinternational groupings of regulators and supervisors, andcommittees of central bank experts.