TRIA Extension Bill Awaited
By Steven Brostoff, Washington Editor
NU Online News Service, June 22, 12:19 p.m. EDT, Washington?The Terrorism Risk Insurance Program would be extended for two years with increased insurance company deductibles and retention under legislation expected to be introduced this afternoon in the House of Representatives.[@@]
Sources told National Underwriter that the legislation would extend TRIA to cover 2006 and 2007. Insurance companies would have to make terrorism insurance available to commercial policyholders during both years.
The insurance company deductible for federal reinsurance would remain at 15 percent during 2006, the fourth year of the program, the same as in 2005. However, it would increase to 20 percent in 2007, sources said.
In addition, insurance company retention would increase to 17.5 percent in 2006, and go to 20 percent in 2007.
Sources add that the legislation will call on the Treasury Department to issue a report on long-term private market solutions to the problem of terrorism insurance, with the goal of eliminating the federal backstop.
As for group life insurance, sources say the legislation will call on Treasury to make a final determination on whether to include group life in TRIA, but it was not immediately clear whether the legislation would outline specific factors Treasury must consider in making the determination.
The primary sponsors of the bill are expected to be Reps. Eric Cantor, R-Va., Richard Baker, R-La., Sue Kelly, R-N.Y., and Pete Sessions, R-Tex. But it is likely that Democratic cosponsors will be added to the bill.
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