A House Republican from Louisiana has come out with a new Terrorism Risk Insurance Act continuation proposal that would add group life to the TRIA program.[@@]
Rep. Richard Baker, R-La., chairman of the capital markets subcommittee at the House Financial Services Committee, has introduced H.R. 4314, a 2-year TRIA extension bill that would create the Terrorism Risk Insurance Revision Act of 2005.
The Bush administration has repeatedly emphasized that it would like to see Congress reduce the scope of the TRIA program. The administration has argued that group life insurers do not deserve to be added to TRIA because they seem to be doing well and have made too little use of commercial terrorism reinsurance.
The House Financial Services Committee posted a summary of H.R. 4314 that made no mention of group life insurance. But the full text of the bill shows that the bill would include protection for group life programs and workers’ compensation programs as well as for commercial property-casualty programs.
The bill would exclude protection for corporate-owned life insurance and bank-owned life insurance programs from the TRIA reinsurance program.
The bill also would:
- Increase the size of the losses needed to trigger use of the TRIA program to $100 million by 2007.
- Raise deductibles.
- Permit insurers to treat a portion of their terrorism premiums as “dedicated terrorism capital” by putting the premiums in “TRIA capital reserve funds.”
- Allow the TRIA program to be renewed for a third year.
- Create a Terrorism Risk Insurance Commission that would draft “specific proposals” to establish a long-term pooling terrorism program.
The current version of TRIA, which was enacted in December 2004, is set to expire Dec. 31.
H.R. 4314 is cosponsored by House Financial Services Committee Chairman Michael Oxley, R-Ohio.
Oxley says in a statement that Congress wants to wean insurers off of federal terrorism reinsurance subsidies.
So far, “industry has been slow to respond,” Oxley says.
Links to the text of H.R. 4314 and other information about the bill are on the Web at http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.04314: