New TRIA Bill Will Slide Through House: Lobbyist

WASHINGTON--A senior property-casualty insurance industry lobbyist predicts the terrorism risk insurance bill extension introduced Monday in the House will have "overwhelming and bipartisan support" on the House floor.

Joel Wood, senior vice president, government affairs, for the Council of Insurance Agents and Brokers, said he believes there is a strong consensus in the House "that the program is justified and necessary."

Representing the consensus of the industry view, Mr. Wood said he is also "confident that intra-industry circular firing squads won't rule the day."

He added, "We think the committee has struck a good balance for commercial insureds on the NBCR [nuclear, biological, chemical and radiological] provisions."

The bill is titled the "Terrorism Risk Insurance Revision and Extension Act of 2007," H.R. 2761.

A hearing is scheduled Thursday before the Capital Markets Subcommittee of the House Financial Services Committee. The bill extends the program for 10 years and adds attacks from NBCR sources specifically to the program. The current TRIA law is set to expire at the end of the year.

Charles E. Symington Jr., senior vice president for government affairs and federal relations for the Independent Insurance Agents and Brokers of America, added, "With the current program expiring at the end of the year, the need to act quickly is imperative in order to bring certainty to policyholders, insurers and the insurance market as a whole."

Marc Racicot, president of the American Insurance Association, also touched on the NBCR issue.

"Creating a long-term program which addresses the NBCR and conventional terrorism risks brings much needed stability and certainty to the market, without which long-term investment, economic development and growth are clearly and substantially threatened," Mr. Racicot said.

Marliss Browder, a senior federal affairs director at the National Association of Mutual Insurance Companies, pointed to the removal of the distinction for domestic terrorism as an important addition.

"It will close a gap in the program's coverage and provide our nation's businesses with the peace of mind that they are covered in the event of loss, regardless of whether the action is the result of foreign actions or 'home-grown' violence, such as the tragic events in Oklahoma City." She added NAMIC is "especially pleased" the legislation reduces the trigger level for federal involvement to $50 million.

"The current $100 million trigger level is a significant hurdle for small and medium-sized insurers, which form the backbone of the industry and support niches of terrorism coverage larger carriers have historically avoided," she said.

Ben McKay, senior vice president for federal government relations for the Property Casualty Insurers Association of America (PCI), pointed to several of the proposed revisions to the current program as positives.

He cited the long-term nature of the extension, a reduced trigger level, and the elimination of the distinction between foreign and domestic terrorist acts.

PCI, like NAMIC, remains concerned about inclusion of the NBCR provision. Mr. McKay said inclusion of mandatory coverage for NBCR perils will have serious negative consequences for consumers and the nation's economy.

"This is an extraordinarily complex issue that cannot and must not be addressed by amending a few sentences in a very important bill," said Mr. McKay. "PCI and its members will be working closely with congressional leaders during the coming debate over TRIA provisions. We think that the NBCR issue should be addressed only after a full study of all its potential implications."