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March 02, 2005 at 07:00 PM
Washington
Several House Democrats introduced legislation last week that would extend the Terrorism Risk Insurance Act by two years, to Dec. 31, 2007. The legislation includes a provision broadening the bill to include support for the group life insurance industry.
The legislation as passed in 2002 included a provision giving the Treasury Department authority to broaden the bill by giving support to the group life industry, but the department declined that option even though the industry presented evidence that reinsurance for these carriers had dried up in the wake of the Sept. 11, 2001 attack.
Insurance and real estate industry trade groups lauded introduction of the measure as a “positive sign” that Congress is interested in extending the bill, an industry priority.
But, privately, insurance industry officials were less sanguine. They had been hopeful the Democrats would wait to introduce a bipartisan bill that headlined Rep. Mike Oxley, R-Ohio, chairman of the Financial Services Committee. Also, the industry is concerned because the bill would raise the retention ratethe threshold level for government contributions to losses suffered by an insurer in a domestic terrorism attackfrom the current 15% to 20% in the second year.
“The industry wants bipartisan agreement,” said one industry lobbyist who asked not to be named but whose views reflect most of the trade groups and companies view of the proposal. “We also dont like the current paradigm [existing TRIA bill] and believe the current retention levels are too high already.”
