The tragic loss of life in London has put new energy into the battle to extend and expand the Terrorism Risk Insurance Act of 2002, according to a representative for the Group Life Coalition.[@@]
“Senators are aware of the issue,” says Ed Harper, a senior vice president in the Washington office of Assurant Inc. “The volume is up.”
Harper, whose company is a major player in the group life market, is head both of the Group Life Coalition, Washington, and the group life task force at the American Council of Life Insurers, Washington.
The federal terrorism reinsurance program created by TRIA does not protect group life insurers, and the reinsurance program is set to expire Dec. 31. The U.S. Treasury Department recently issued a report on TRIA that suggested the federal government should transfer more responsibility for terrorism reinsurance to the private sector, or shut down the federal program altogether.
The House Financial Services Committee will hold a TRIA renewal hearing Wednesday, and the Senate Financial Services Committee will hold a TRIA renewal hearing Thursday.
Harper would not comment on the fact that group life was mentioned only briefly in the Treasury report or on the insurance industry’s disappointment that Treasury was so cool about the idea of extending the program.
But, as a result of the London attacks, members of Congress “are paying more attention,” Harper says. “The issue has moved from the academic to the emotional.”
Philmore Anderson, a lobbyist with D.C. Navigators, Washington, is expressing similar views. “I think it is human nature that as the event fades, interest declines,” Anderson says. “But, clearly, the urgency is back.”
TRIA includes a provision that required Treasury to look into the idea of adding group life protection to the federal terrorism reinsurance program. But Treasury ended up declining to add TRIA to the program, arguing that the availability of group life coverage remained adequate despite the group life insurers’ complaints about lack of private reinsurance.
“In the past, we haven’t told our story aggressively,” Anderson says. “But this time, we’re determined to ensure in this TRIA process that Congress acts to protect the financial security of working Americans–160 million of them–who have group life insurance as their sole source of protection.”
This time around, the group life industry has persuaded members of the National Association of Insurance Commissioners, Kansas City, Mo., to act quickly to pass a resolution supporting inclusion of group life in an extended TRIA program.
The group life industry also has lined up support from property-casualty insurers, and it has commissioned a detailed report on the group life market from consultants in the Portland, Maine, offices of Milliman Inc.
The authors of the report point out that group life is the only life insurance covering many of the 160 million members of U.S. group life plans.
Many of the group life insureds are police officers, firefighters, transit employees and other workers who face a relatively high level of exposure to terrorist attacks, the authors of the report assert.
The group life catastrophic reinsurance market has “not come back post 9/11,” the authors contend. “Conversely, the reinsurance market has begun to return for TRIA-supported workers’ compensation. Thus, there is evidence that TRIA did not retard the market’s development, but rather enhanced it.”