An executive with a risk retention group told a congressional panel yesterday that the insurance sector would have more market capacity if her industry was given permission to insure property.
The testimony from Janice Abraham, president of United Educators, a Reciprocal Risk Retention Group, came before the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
Her appearance was the latest in an ongoing drive by risk retention groups to secure federal approval for insuring additional areas of risk. The RRGS have been limited to providing liability insurance since their structure was approved by Congress in 1986.
The hearing, at which Ms. Abraham gave her testimony, was called to consider a framework for renewal of the government supports for insurers contained in the Terrorism Risk Insurance Act.
Ms. Abraham advocated that the federal government partner with private industry to provide adequate terrorism insurance.
She encouraged the subcommittee to consider expanding the Liability Risk Retention Act to include commercial property as a way to expand market capacity, add competitiveness and enhance stability.
"The ability to expand into property insurance, using the principles of member owned and controlled risk management, broad coverage, stable pricing and coordinated claims services would help fill a significant need of educational institutions," she said.
Ms. Abraham added that such a change would "allow businesses and nonprofits with a federal government terrorism backstop to add much needed capacity and competitiveness to the terrorism insurance market for many years into the future."
Earlier this month the American Risk Retention Coalition was given the go-ahead by Rep. Paul Kanjorski, D-Pa., the subcommittee's chairman, and Rep. Deborah Pryce, R-Ohio, ranking subcommittee minority member, to draft a bipartisan bill expanding the scope of the LRRA to include property products.
Ms. Abraham is a member of the National Risk Retention Association and has previously served as a NRRA board member and treasurer. Last month she made her pitch for expanding RRG's area of coverage to the Subcommittee on Housing and Community Opportunity.
Skip Meyers, NRRA general counsel, said in a statement that Ms. Abraham's testimony reflected NRRA's view on both TRIA and the expansion of the Liability Risk Retention Act.
Ms. Abraham's subcommittee testimony is on the NRRA Web site, www.nrra-usa.org.
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