Bill to Enhance Terrorism Insurance Introduced
On Monday, House Democrats introduced legislation to extend the federal terrorism insurance backstop program for 10 years. The current program is set to expire on at year-end. A hearing on the bill by the House Financial Services Committee’s Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises is scheduled for Thursday, June 21.
“We need to keep in perspective that this bill is necessary for economic development and to protect property owners, building tenants, developers and people who work or live in high-risk areas,” the chairman of the committee—Rep. Barney Frank, D-Mass.—said in statement announcing the bill’s introduction.
The Terrorism Risk Insurance Revision and Extension Act of 2007 would enhance the current program, though, by requiring carriers to offer policyholders coverage for nuclear, biological, chemical and radiological terrorist attacks. It also would change the program’s definition of covered terrorist attacks to include acts of domestic terrorism and would also add group life insurance to the lines of insurance covered by the program. The bill also would require further study of the development of a private terrorism insurance market.
“We have made significant improvements in this legislation, and we believe we have struck the right balance in providing assurances for business and workers in urban areas and encouraging the creation of a private market,” added Rep. Frank, who is co-sponsoring the bill.
The Terrorism Risk Insurance Act was passed in 2002, following September 11. It requires insurance companies to provide terrorism-specific insurance products, and guarantees that the federal government will pay the majority of the value of any claim arising from terrorism.
Published on June 19, 2007
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