It’s still unclear what the main effort to extend the Terrorism Risk Insurance Program will mean for group life insurance.[@@]
Sources have told National Underwriter that lawmakers are about to introduce a bill in the U.S. House of Representatives that would extend the program for 2 years with increased insurance company deductibles and retention.
The legislation would extend TRIA to cover 2006 and 2007, and insurance companies would have to make terrorism insurance available to commercial policyholders during both years, the sources said.
The insurance company deductible for federal reinsurance would remain at 15% during 2006, the fourth year of the program, the same as in 2005. The deductible would increase to 20% in 2007, sources said.
In addition, insurance company retention would increase to 17.5% in 2006 and go to 20% in 2007.
Sources said the legislation will call on the Treasury Department to issue a report on long-term private market solutions for the problem of terrorism insurance, with the goal of eliminating the federal backstop.
As for group life insurance, sources said the legislation will call on Treasury to make a final determination about whether to include group life in TRIA, but it is not yet known whether the legislation will outline specific factors Treasury must consider in making the determination.
At press time, the primary sponsors of the bill are expected to be Reps. Eric Cantor, R-Va., Richard Baker, R-La., Sue Kelly, R-N.Y., and Pete Sessions, R-Texas.
It is likely that Democratic co-sponsors will be added to the bill, sources said.