The Treasury Department would again have to decide whether to include group life insurance in the federal terrorism reinsurance program under legislation introduced in the House of Representatives.
The legislation, H.R. 4634, would extend the Terrorism Risk Insurance Act for two years until the end of 2007. But it would also increase the insurance company deductible and retention level.
Moreover, the legislation does not affirmatively include group life in TRIA. Rather, it calls for another Treasury Department determination on group life. An earlier Treasury determination came out against including group life.
Phil Anderson, a spokesman for the Group Life Coalition, praises the introduction of H.R. 4634 but adds that it is important to include group life. “As Congress works to extend TRIA, it’s important for lawmakers to remember that we need to insure the people inside the buildings, too,” he says.
Anderson cites a recent study which says a major terrorist attack could cost the group life industry more than $9 billion. “Without the protection of TRIA, losses of this magnitude could have a severe impact on the cost and availability of group life insurance,” he says.
Jack Dolan, a spokesman for the American Council of Life Insurers, says ACLI is certainly pleased group life is mentioned in the legislation. But ACLI’s preference, he says, is for Congress to instruct Treasury to include group life in TRIA.
Still, Dolan says, H.R. 4634 will serve as a placeholder and ACLI will work to improve it during the legislative process.
One of the primary sponsors of the legislation, Rep. Richard Baker, R-La., says he and the other co-sponsors are open to discussions with all stakeholders. Speaking at a press briefing, Baker said he does not think there will be more than one extension of TRIA.
He took issue with some critics who charge that TRIA’s structure inhibits development of private sector solutions to the problem of terrorism insurance. Baker says he certainly has not reached that conclusion, noting that Treasury is engaged in a study to determine whether the capital markets can finance terrorism risk.
He adds that terrorism insurance is vital for job creation. Many people, Baker says, have charged that the current economic recovery is a “jobless” recovery, so it would be “stupid” to take away a tool, TRIA, that creates new jobs.