9/11 Shows Need For TRIA, Says I.I.I.

Six years after the 9/11 attacks, the head of an insurance information group said it is vital that a long-term government terrorism risk insurance program be passed.

"With many realistic attack scenarios producing losses several times that of September 11, it is essential that a long-term terrorism risk insurance program be enacted," Robert P. Hartwig, president of the Insurance Information Institute, said in a statement.

Mr. Hartwig added, "Implementation of such a measure is a key component of the nation's effort to protect the financial homeland. Congress is considering an extension which will protect millions of businesses and their workers. It also addresses the potential ambiguity of domestic vs. international terrorism acts."

He noted that The Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA) has to date won support in the U.S. House of Representatives, and will also need to win approval from the U.S. Senate and the president before it goes into effect. The current TRIA law expires Dec. 31.

A long-term terrorism risk insurance program's benefits, Mr. Hartwig said, will be felt immediately and will affect virtually every segment of the economy.

"Businesses in cities and towns, large and small, from coast to coast would under this proposal be able to purchase terrorism risk insurance more readily, secure in the knowledge that the protection will remain available for many years to come," he said.

"It should be particularly beneficial to the construction, commercial real estate, manufacturing, and utility and transportation industries. Governments that own and operate critical infrastructure such as airports, ports and bridges will also benefit."

But, he expressed concern over the inclusion of a provision that would compel insurers to cover nuclear, biological, chemical and radiological risks.

"NBCR risks pose unique threats which have in the past not been covered by standard property-casualty insurance policies. Insurers have little to no experience insuring against these risks, the magnitude of which can easily exceed the claims-paying resources of private insurers, even with TRIREA in place," Mr. Hartwig warned.

Threat of another attack remains a source of uncertainty for the U.S. economy, with potentially negative consequences for both business interests and employment, according to the Insurance Information Institute (I.I.I.).

"Besides killing almost 3,000 individuals, the terrorists also sent economic shock waves throughout the U.S. economy," said Mr. Hartwig.

"By paying September 11-related claims totaling $31.6 billion, the insurance industry helped families and businesses get back on their feet after an event without precedent in U.S. history." Adjusted for inflation, insurers paid the equivalent of $35.9 billion in September 11 claims in 2006 dollars, the I.I.I. estimates.