The Consumer Federation of America is reminding Senate leaders that it wants them to kill, or at least scale back, the federal Terrorism Risk Reinsurance Act program.[@@]
The TRIA program, enacted in the wake of the Sept. 11, 2001, terrorism attacks, is scheduled to expire Dec. 31. The current program provides limited federal protection for property-casualty insurers that face huge claims resulting from large terrorist attacks.
J. Robert Hunter, insurance director at the CFA, Washington, opposed the creation of TRIA and has been working since TRIA was enacted to keep Congress from extending it.
Now industry lobbyists doubt Congress can extend the program before mid-December, at the earliest.
Hunter and a colleague, Travis Plunkett, CFA’s legislative director, today sent letters repeating their opposition to TRIA extension to Senate Majority Leader William Frist, R-Tenn., and Senate Minority Leader Harry Reid, D-Nev., as well as to the top Republican and the top Democrat on the Senate Banking, Housing and Urban Affairs Committee.
Justifying terrorism insurance subsidies is impossible at a time when insurance profits are skyrocketing, commercial insurance rates are falling and federal budget deficits are growing, Hunter and Plunkett write.
“Do not add group life coverage to TRIA,” Hunter and Plunkett add. “Despite the Department of Treasury’s recommendation to reduce TRIA reimbursed lines, group life insurers are lobbying mightily for an expansion. There is no meaningful evidence that justifies expanding TRIA to cover group life insurance.”
Prices in the group life market are low and competition is strong, and group life insurers are not making enough use of private mechanisms for spreading risk, Hunter and Plunkett write.