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NAMIC Commends Senate Passage of TRIA

House Expected to Take Action Before Congress Wraps Up for Year

WASHINGTON, D.C. (Dec. 19, 2005) – The National Association of Mutual Insurance Companies (NAMIC) commends the House and Senate for reaching a compromise Friday on TRIA, leading the Senate to be able to approve S. 467 late Friday night. The House is expected to take up the bill on Saturday.

“NAMIC is pleased that the House and Senate were able to meld their differing TRIA extension bills. This is welcome news and it paves the way for Congress to approve a two-year extension of TRIA before it finishes its business for the year,” said Charles M. Chamness, president/CEO of NAMIC. “In essence, both sides agreed to the bill passed by the Senate with an increase in the industry payback provision requested by the House,” he continued. Under the new version of the bill, the amount the insurance industry will have to repay in 2006 increased from $17.5 billion in the original Senate bill to $25 billion. In the final year of the program, this number increases to $27.5 billion.

“It took some extraordinary work to finalize TRIA extension legislation before it was scheduled to expire at the end of this month,” Chamness said. “Of particular note were the efforts of House Financial Services Committee Chairman Mike Oxley, R – Ohio, Ranking Democrat Barney Frank, D- Mass., Subcommittee on Capital Markets Chairman Richard Baker, R – La., Congressman Paul Kanjorski, D – Pa., Congresswoman Sue Kelly, R – N.Y., Senate Banking Committee Chairman Richard Shelby, R – Ala., Ranking Democrat Paul Sarbanes, D – Md., and Senators Christopher Dodd, D – Ct., and Robert Bennett, R – Utah, for working to secure this vital federal reinsurance backstop.”

Highlights of the legislation include:

  • A two year extension of TRIA.
  • Coverage will no longer be mandated for farmowners multi-peril insurance, a position strongly advocated by NAMIC on behalf of its farm mutuals.
  • Commercial auto, burglary/theft, surety and professional liability will no longer be covered.
  • NCBR coverage will not be required in property and liability policies, a provision in the House-passed bill that NAMIC opposed.
  • The industry's deductible will increase:
    2005 – 15 percent
    2006 – 17.5 percent
    2007 – 20 percent
  • The event trigger will increase:
    2005 – $ 5 million in insured losses
    2006 – $ 50 million in insured losses
    2007– $100 million in insured losses
  • The legislation provides for a "President's Working Group" to be appointed to review the effectiveness of the program and make recommendations for improvement. NAMIC will work with members of the House and Senate to created a permanent public/private partnership on terrorism coverage when the TRIA extension expires on Dec. 31, 2007.

For further information, contact
Laura Biddle-Bruckman
(317) 875-5250 Tel
(317) 879-8408 Fax
lbruckman@namic.org

Posted: Friday, December 16, 2005 12:00:00 AM. Modified: Saturday, December 17, 2005 10:34:03 PM.

317.875.5250 - Indianapolis  |  202.628.1558 - Washington, D.C.

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