Opposition to including group life in an expanded federal terrorism reinsurance program surfaced today at a Senate Banking Committee hearing on renewal of the Terrorism Risk Insurance Act.[@@]
Howard Mills, acting New York insurance superintendent, spoke in favor of renewing TRIA and adding group life to the TRIA program.
“We do support the inclusion of group life,” Mills said in his capacity as a New York insurance regulator. He noted such factors as the high concentration of workers in New York City as reasons for concern about group life terrorism risk.
But Mills also appeared on behalf of the National Association of Insurance Commissioners, Kansas City, Mo., and he reported that the NAIC has not taken an official position on adding group life to TRIA.
Robert Hunter, director for the Consumer of America, said he opposes the idea of renewing TRIA, and he also rejected calls for extending the program to include group life insurance.
Hunter referred to TRIA property-casualty reinsurance as “free reinsurance.”
“I don’t think the taxpayers should have to shoulder that,” Hunter said.
In response to the debate about whether or not to include group life in an expanded TRIA program, Hunter said, “The Treasury Department wisely decided not. I think you should ask them why, and I think I know why. It’s not necessary.”
TRIA was enacted in November 2002 and expires Dec. 31.
S. 467, a bill introduced several months ago by Sens. Robert Bennett, R-Utah, and Christopher Dodd, D-Conn., would extend TRIA for 2 years while Congress makes a permanent decision about who should pay for damage caused by terrorist attacks.
TRIA renewal efforts are on hold on Capitol Hill because the existing law requires the Treasury Department to report to Congress on the effectiveness of the terrorism reinsurance program by June 30.
“We will suffer significant economic loss if the program is not renewed,” said Sen. Charles Schumer, D-N.Y., who opened the hearing.
Many new construction projects are already on hold because provisions in current insurance policies say coverage for terrorism risk will expire Dec. 31, regardless of the policy termination date, when the TRIA reinsurance program expires, Schumer said.