TRIA Must Change Or Die, Insurers Told

Rep. DeLay outlines his demand for a "free market" solution to the problem of securing terrorism coverage in a letter scheduled to be published in the April edition of the Property Casualty Insurers Association of Americas Executive Update.

However, the panels chairmanRep. Mike Oxley, R-Ohiodid not indicate how the bill could be reworked to Rep. DeLays liking and still win the support of the industry, which insists that extension of the federal reinsurance backstop in TRIA is necessary to ensure the availability of terrorism insurance.

"We are working on a pro-market solution to satisfy a certain member of the Texas delegation," Rep. Oxley told lobbyists at a private meeting on March 11. Five lobbyists who attended the meeting confirmed the remark and indicated that Rep. DeLay was the "member of the Texas delegation" he was talking about.

Rep. Oxley also told the lobbyists that the committee will await delivery of the Treasury report on the effectiveness of the current TRIA program before completing a new draft. The Treasury report by law must be released by June 30, but the agency has said it will try to complete work well in advance of that date. No inkling of the Bush Administrations position on extension of the law has surfaced.

"On Dec. 31 of this year, TRIA will expire," wrote Rep. DeLay in his letter to PCI. "As Congress begins its debate on the future of how we insure against terrorism, it is imperative that the industrywork with Congress to develop a long-term solution that does not involve the federal government serving as a reinsurer or permanent backstop. Nor can the government become a funding mechanism for the insurance industry."

Rep. DeLay added that "if the industry will work with us on Capitol Hill to find a way to accomplish this, we will likely be more understanding of a limited, short-term program to help get it started."

PCI President and CEO Ernst Csiszar, the former president of the National Association of Insurance Commissioners, said his vision of a permanent solution to the terrorism insurance problem is "a public/private partnership to effectively develop a long-term solution to the problem of financing terrorism risk."

He outlined his view in testimony prepared for delivery before the Senate Banking Committee at a hearing on the issue that had been scheduled for March 4. The hearing was postponed indefinitely at the last minute.

Reproduced from National Underwriter Edition, March 17, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.