The life insurance industry’s hopes for including group life insurance for the first time in legislation extending federal support for insurers after catastrophic terror attacks have suffered a serious blow.
That occurred on Oct. 17 when the Senate Banking Committee passed–with Bush administration support–a bare-bones bill that effectively extends the current program for 7 years.
Commenting on the decision, Jack Dolan, a spokesman for the American Council of Life Insurers, said, “This vote is really unfortunate, because the federal backstop is needed.”
He added that, “Adequate reinsurance isn’t available in the group market. Adding group life to the program could help boost the market, bringing more coverage to people.”
Regarding the Treasury Department’s decision to say it would support the Senate version of the backstop extension, Dolan added, “We certainly wanted Treasury’s support on the issue, but their recent comments are not surprising.”
Now, he said, “we’re focusing on a conference strategy, looking to ensure group life remains in the Terrorism Risk Insurance Act by working with supporting members in the House, as well as in the Senate.”
Dolan added that the facts are clear: “Group life insurance is a major source of financial protection for Americans. So, without TRIA, many workers will be without the financial protection they need.”
The Senate Banking Committee version was hammered out by the staffs of Sen. Chris Dodd, D-Conn., chairman of the committee, and Sen. Richard Shelby, R-Ala., ranking minority member of the committee.
The compromise bill agreed to by Dodd and Shelby and reported out by the committee makes only a few changes to the current legislation, which expires Dec. 31.
These include the 7-year extension–as compared to the current 2-year extension–as well as a provision that adds domestic terrorism to the program.