Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Life Insurance

New Treasury Official: Keep Group Life Out Of TRIA

Your article was successfully shared with the contacts you provided.

A high-level member of the Bush administration is confirming the administration’s opposition to inclusion of group life in the Terrorism Risk Insurance Act.[@@]

Emil W. Henry Jr., the new assistant secretary of the Treasury for financial institutions, said point blank in an interview, “We oppose inclusion of group life in any extension of the TRIA program.”

The law that created TRIA, enacted in the wake of the Sept. 11, 2001, terrorist attacks, is set to expire Dec. 31.

Time for passing any kind of TRIA extension is running short, especially in the Senate, because members of Congress want to finish their work for the year before Thanksgiving.

The majority staff of the House Financial Services Committee is including a group life provision in its efforts to write TRIA extension legislation, and the idea of adding group life to TRIA appears to have broad, bipartisan support in the House.

But the Bush administration is focusing on shaping the TRIA extension language in the Senate, where the staff of the Senate Banking Committee is working on a narrow extension measure with a firm sunset date and no group life provision.

Why is the Bush administration so firmly opposed to including group life in TRIA?

“We want fewer lines and a smaller overall program in any extension,” Henry said. Including group life in TRIA “is certainly not consistent with reducing the number of lines of business covered.”

Moreover, in the group life market, “I don’t believe there has been any private market failure,” Henry says. “Group life has been a line that has been offered extensively, even though it has been excluded as a TRIA line.”

In the interview, Henry reaffirmed Bush administration support for a position that could threaten any TRIA extension efforts: A call for a TRIA extension provision that would bar any government liability for punitive damages stemming from a terrorist attack.

“The administration has long stated its distaste for government dollars being paid for punitive damages,” Henry said.

Secretary of the Treasury John Snow “sent a letter to Congress June 30 where he says specifically that current litigation rules would allow unscrupulous trial lawyers to profit from a terrorist attack and would expose the American taxpayer to excessive and inappropriate costs,” Henry said.

Democratic opposition to the punitive damages provision almost killed the original TRIA bill when it came up on the House floor in November 2002.

Even though the Democrats are in a minority in the Senate, the tight TRIA sunset deadline might put them in a position to kill any TRIA extension bill that includes a punitive-damages shield provision, industry lobbyists say.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.