The Bush administration is opposing both the idea of adding group life to the federal Terrorism Risk Insurance Act program and efforts to extend the program for a long period.
“The program should not be expanded to introduce new lines or types of coverage willingly provided by the private market,” David Nason, an assistant secretary at the Treasury Department, testified today before the House Financial Services Committee capital markets subcommittee, at a hearing on H.R. 2671, the Terrorism Risk Insurance Revision and Extension Act of 2007.
H.R. 2671 would extend TRIA for 10 years, bring group life into the program and add protection against domestic terrorism.
The Bush administration is insisting that TRIA not be expanded, that it remain temporary and short-term, and that private retentions increase, Nason said.
“Unfortunately, H.R. 2761 does not meet these critical elements,” Nason said. “Without these critical elements, we would not be supportive of extending TRIA as, in our view, the program would be moving in the wrong direction…. In Treasury’s view, from both a market and economic perspective, it would be better to have no TRIA than a bad TRIA.”
Nason talked about inclusion of group life in H.R. 2761 as an example of what Bush administration officials believe is wrong with the bill.
“We do not see any evidence of problems in the market for group life insurance or in coverage for domestic terrorism,” Nason said.
Expanding the TRIA program to include markets that already are functioning well “is inconsistent with the appropriate role of the federal government in the terrorism risk insurance market,” Nason said.
“We are willing to continue to work with Congress toward finding an appropriately balanced solution and to establish the appropriate increases in private sector participation,” Nason said.
Nason did not say whether Bush would veto H.R. 2761 if the bill gets through Congress.