Insurers could benefit from the legal problems that have forced Rep. Tom DeLay, R-Texas, to temporarily give up his post as House majority leader.[@@]
DeLay has been cool toward efforts to extend the Terrorism Risk Insurance Act beyond its current Dec. 31 expiration date and to expand TRIA to include group life insurance.
DeLay supporters say DeLay has been making admirable efforts to keep the federal government from using taxpayers’ money to support private companies, but critics say DeLay and some officials in the Bush administration believe that TRIA extension appeals mainly to voters in states that usually vote for Democratic presidential candidates.
National Underwriter has received a copy of a memo about DeLay that purportedly was written by Joel Wood, senior vice president of government affairs at the Council of Insurance Agents and Brokers, Washington.
In the memo, which apparently was written after news that DeLay had been indicted surfaced, the author writes that the indictment would have “significant consequences” for TRIA extension.
“Congressman DeLay was a major obstacle in passage of a 2-year extension of TRIA last year,” the author of the memo writes.
DeLay “has pledged to do his best to block any straightforward extension of TRIA this year unless the federal backstop program was significantly scaled back or significantly altered to make it appear to be more of a private-sector solution to the problem of terrorism coverage,” the memo author writes.
Rep. David Dreier, R-Calif., chairman of the House Rules Committee and one of DeLay’s 2 temporary replacements, “has been friendly to the insurance/policyholder community on the TRIA issue in the past,” the memo author writes.
“Hopefully, the tragedy of Katrina will remind policymakers of the necessity of securing the economy through catastrophic insurance coverage,” the memo author writes.
Through a representative, Wood declined to discuss whether he had written the memo.
“DeLay’s staff has been working very constructively with the House Financial Services Committee to develop significant alternative proposals” to the current TRIA bill, the CIAB representative said.
The National Association of Mutual Insurance Companies, Indianapolis, has sent the House Financial Services Committee staff a memo of its own suggesting that the proposal now in play, which would increase the event size needed to trigger TRIA to $500 million, “is likely to drive out 81% of the private insurance market.”
“This will lead to the creation of an oligopoly in terror-prone areas, as only a relatively small number of large companies will be able to offer coverage,” NAMIC says in its memo.