Oxley Commits To TRIA Extension
By Caroline mcdonald
Chicago
Rep. Michael G. Oxley, R-Ohio, told insurers last week he is committed to seeing the Terrorism Risk and Insurance Act extended before the government backstop expires at year's end.
"It would be a travesty of enormous proportions for our economy should we not be able to extend TRIA," he told industry officials here at the annual meeting of the Property Casualty Insurers Association of America.
He said the Sept. 11, 2001 terrorist attacks "did more than murder thousands of people. The attacks drained the insurance industry's surplus and threatened both marketplace solvency and our country's economy."
Mr. Oxley, who chairs the House Committee on Financial Services, said TRIA was passed because after 9/11, insurers began to non-renew commercial coverage, and "large policyholders were unable to obtain insurance for their construction and development projects." He said that TRIA–designed to be a short-term, temporary fix–"succeeded in stabilizing the markets."
With a Dec. 31 sunset looming, efforts to extend and perhaps modify the program have been problematic. "I have made a personal plea when we've had [Treasury] Secretary [John] Snow testify before our committee, that our committee and I are totally committed to reauthorizing TRIA," he said, adding that Mr. Snow has taken a personal interest in TRIA.
He said he is working with Treasury, the White House and the Senate "to make certain that we don't leave Washington for the holidays until we have passed a TRIA extension," although, he added, "I'm not sure what the details are going to be…"
Creating a pooling or mutual reinsurance facility, he noted, would allow dedicated private capital for terrorism risk to accumulate over time and gradually reduce the federal backstop.
One concept that must be included in the House bill, he noted, is full taxpayer protection. The current program only contains partial taxpayer repayment provisions, he said. "Taxpayer protection is very important to me and the House leadership, and full payback provisions will be incorporated in any new terrorism legislation," he noted.
"It would be a travesty of enormous proportions for our economy should we not be able to extend TRIA."
Rep. Michael G. Oxley, R-Ohio
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