WASHINGTON (Dec. 18, 2007) – The National Association of Mutual Insurance Companies (NAMIC) today issued the following statement in response to final congressional approval of H.R. 2761, the Terrorism Risk Insurance Revision and Extension Act of 2007. The comments may be attributed to Charles M. Chamness, NAMIC president/CEO.
“We commend the House and Senate for creating and adopting this critical bipartisan compromise legislation to address terrorism risk insurance issues prior to the December 31 expiration of the current law. NAMIC especially congratulates members of Congress for having the acumen to adopt a long-term solution to the threat of terrorism. By extending the program for seven years, Congress has abandoned the two-year patchwork approach of the previous extension and assured financial stability in the event of another terrorist attack.
“By resisting the temptation to increase deductibles, co-payments, and the trigger level from their current rates, Congress has ensured the continued participation of many medium- and smaller-sized insurance companies. We are also pleased that the legislation applies to both domestic and foreign terrorism attacks and places an annual cap on insurers’ liability. Increasing insurers’ liability could have forced many insurers to withdraw from the market, as their exposure relative to premiums earned on terrorism coverages would have been too great.
“NAMIC also salutes Congress for abandoning the proposal to include a provision to require insurers to offer coverage for terrorist attacks using weapons of mass destruction. The reality is that these events are uninsurable, and including that provision in the legislation would have forced many insurers out of the program.
“The ability of small- and medium-sized insurers to participate in the program will assure coverage in many of the areas where large insurers do not provide it and continue the competition necessary to keep prices as low as possible for policyholders.
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