Group Life In TRIA Extension Bill

Harper explained that “it is clear that group life is an integral part of the damage arising from a terrorism attack and needs to be taken into account in constructing a federal backstop to terrorism insurance coverage.”

He added that he believes a “consensus is emerging on both sides of the aisle in both Houses of Congress and throughout the insurance industry that group life must be part of any bill.”

The current TRIA bill runs out at the end of this year. The current bill contains language giving the Treasury Department the authority to include group life in federal backstop coverage, but the agency opted not to, saying there was adequate availability of group life insurance. The industrys argument is that while all losses from the 9/11 attack were paid without damage to the industry, reinsurance coverage has dried up as a result of the attack and the resulting losses.

Senate and House action is unlikely until the Treasury Department files the report it is mandated to issue by June 30 on current market conditions. Insurance and policyholder interests say nothing is likely to occur until that report is issued, although some sources say Treasury could release its report before the due date. Another issue is when the House Financial Services Committee will show its hand on the issue, with members of the committee introducing legislation and its leadership scheduling a hearing. An April hearing in that committee is expected.

Equally important, all of the principals, including members of Congress and administration officials as well as insurers and policyholders, believe that lack of coverage for chemical, biological, radiation and nuclear risks, constitutes a huge gap in the program.

For example, in Senate testimony Feb. 16, Porter Goss, the director of the Central Intelligence Agency, said the terrorism threat endures and that “it may be only a matter of time” before extremist groups attempt to use chemical, biological, radiological or nuclear weapons in the U.S.

Clifton Rodgers, senior vice president at the Real Estate Roundtable, a member of the Coalition to Insure Against Terrorism, which represents policyholders, said TRIA as currently written could serve as a backstop to CBRN coverage but that currently there is no insurer writing this coverage.

Martin L. DePoy, steering committee coordinator of the CIAT and vice president for government relations at the National Association of Real Estate Investment Trusts said, “Americans are well aware that it is not a matter of if, but when, terrorists will strike again, a fact reiterated by Director Goss.”

DePoy added that, “Goss observations, in combination with Greenspans comments, underline the importance of Congress acting now to provide for the availability of terrorism insurance next year.” DePoy urged lawmakers to determine quickly how best to structure the law to ensure that citizens are able to secure truly comprehensive coverage against terrorism. “The risks cited by the CIA directorchemical, biological, radiological and nuclear attacksare almost wholly uninsured today. As Congress works to extend the availability of terrorism insurance into next year, we ask that it also begin efforts to identify a long-term solution to the insurance challenge presented by acts of terrorism, whether through conventional or unconventional means,” he said.

Reproduced from National Underwriter Edition, February 25, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.