PCI Hails Passage of Long-Term TRIA Extension

Today’s House passage of a long-term extension of the Terrorism Risk Insurance Act (TRIA) is a tremendous victory for our nation’s economic security, commercial insurance consumers, and the entire business sector, according to the Property Casualty Insurers Association of America (PCI). 
 
The bill, which now heads to President Bush’s desk for his expected signature and enactment into law, will extend the federal terrorism insurance backstop for seven years and end the existing bill’s distinction between foreign and domestic acts of terrorism. It will do so without increasing the level of damages necessary to trigger the program ($100 million) or adding an onerous mandatory “make-available” requirement for attacks by nuclear, biological, chemical or radiological (NBCR) weapons of mass destruction. The insurance industry was divided on inclusion of NBCR, but PCI vigorously opposed it. 
 
“We are grateful that both the House and Senate have passed a bill that shares our views on the priorities for the extension of this vital program,” said David A. Sampson, PCI’s president and CEO. “The seven-year period will provide the market with much-needed stability necessary to provide insurance for long-term commercial development projects that otherwise might not get off the ground. This will not only create jobs and spur economic growth, but it will also protect our economy in the event of an attack, and it will send a strong message to those who would attack our nation that they will not have the power to dictate where and when we build.” 
 
The final bill represents significant improvements over what many informed observers expected just weeks or months ago. A much shorter extension, significantly higher triggers, and the addition of an NBCR mandate had been anticipated in the early stages of drafting the bill.  
 
“A great deal of credit goes to House Financial Services Committee Chairman Barney Frank (D-Mass.) and his colleagues in the House for moving the needle on duration and triggers,” Sampson said. “We do not believe we could have gotten a bill that incorporates a long-term extension with no increase in the trigger level without the efforts of Chairman Frank and his colleagues. We also thank the Senate Banking Committee—particularly Chairman Chris Dodd (D-Conn.) and Ranking Member Richard Shelby (R-Ala.)—for agreeing to a long-term extension and holding the line on triggers.” 
 
On the NBCR issue, PCI made the case that this provision would have likely had a negative effect on the overall program. 
 
“We are pleased that members of Congress understand that attacks using weapons of mass destruction are uninsurable. PCI members felt that it would be an onerous and risky burden for both insurers—particularly small- to mid-sized companies—and policyholders to expand the program to require companies to offer NBCR coverage to their policyholders,” Sampson said. "We are very pleased that we succeeded in having this provision removed from the final bill.” 
 
About PCI 
 
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $194 billion in annual premium, 40.1 percent of the nation’s property/casualty insurance. Member companies write 51.3 percent of the U.S. automobile insurance market, 39 percent of the homeowners market, 32.1 percent of the commercial property and liability market, and 38.7 percent of the private workers compensation market.