Trade Groups Marshal TRIA Arguments

Insurance trade group representatives are citing a letter to congressional leaders from the National Association of Insurance Commissioners backing TRIA renewal as well as linking the measure to the aims of the recent summit meeting of President Bush, Canadian Prime Minister Paul Martin and Mexican President Vincente Fox.

The three-nation meeting at Baylor University in Waco, Texas, dealt with issues relating to border security and the prosperity of all three countries.

David Snyder, vice president and assistant general counsel for the American Insurance Association, said the extension of the backstop created by TRIA is a key ingredient to ensuring the continued growth of the three countries' economies.

"TRIA has contributed to the economic well-being of the United States, and its vital safety net needs to remain in place," he said. "Because of TRIA, commercial insurance is available to protect the free flow of goods crossing the Mexican and Canadian borders. Clearly, our nation's ability to recover from a catastrophic terror attack would be greatly hampered if a healthy terrorism insurance market did not exist."

Among the items on the three leaders' agenda was the "freer flow of capital and the efficient provision of financial services throughout North America" by, among other things, developing "ways to improve convenience and cost of insurance coverage for carriers engaged in cross border commerce."

The regulators' support for a TRIA extension from the NAIC came in a recent letter written by NAIC president and Pennsylvania insurance commissioner Diane Koken.

"Access to insurance is essential to business confidence and continued economic growth. Some terrorism risks may be largely uninsurable without a backstop," Ms. Koken wrote. "The members of the National Association of Insurance Commissioners are extremely concerned that significant market disruptions will develop before TRIA's expiration."

Carl Parks, senior vice president of federal government relations for the Property Casualty Insurers Association of America, said the PCI was "pleased that the NAIC recognizes the importance of TRIA and is working actively on Capitol Hill to secure an extension of the act. Without an extension, market disruption is a virtual certainty,"

The industry has maintained that the TRIA program is still needed because the market remains unable to cover terrorism risks

"A long-term solution to the problem of insuring against terror should be the end goal of both legislators and the insurance industry," Mr. Parks said. "However, it is vitally important that legislators recognize that if TRIA is allowed to expire, it could have a serious impact on insurance markets and on our economy."