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March 10, 2005 at 07:00 PM
Several House Democrats introduced legislation late Tuesday that would extend the Terrorism Risk Insurance Act.[@@]
The legislation would extend TRIA by two years, to Dec. 31, 2007. It 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. The department declined that option, however, even though the group life industry presented evidence that reinsurance for these carriers had dried up in the wake of the Sept. 11th, 2001 attack.
Insurance 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 were hopeful that 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 rate–the threshold level for government contributions to losses suffered by an insurer in a domestic terrorism attack–from 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 don’t like the current [TRIA bill] and believe the current retention levels are too high already.”
The industry is also concerned that the Bush administration declined to signal its views on extension when a Treasury Department official spoke on the issue at a conference last week in Washington, D.C. sponsored by the Networks’ Financial Institute, Terre Haute, Ind.
