The Treasury Department has issued interim guidance to assist the insurance industry in meeting new requirements for the Terrorism Risk Insurance Program.
On Dec. 22, 2005, President Bush signed into law the Terrorism Risk Insurance Extension Act of 2005, which reauthorizes the Terrorism Risk Insurance Program for two years, while expanding the private sector role and reducing the federal share of compensation for insured losses under the program.
“By signing this bill into public law, the President sent a very clear and important message regarding national preparedness against future terrorism attacks,” said NAMIC President Charles M. Chamness. “Terrorism insurance is a classic ‘uninsurable risk’ and it was essential that the Bush Administration and Congress provide a meaningful short-term extension of TRIA to give the industry the time necessary to build a long-term public-private solution.”
“This two-year TRIA extension will permit Congress and the insurance industry to develop alternatives to protect the economy from future terrorist attacks and to look for an all industry market-based approach so that Congress does not have to continually revisit this issue,” said Chamness.
The interim guidance is designed to assist insurers in complying with changes to the Terrorism Risk Insurance Program made by the Extension Act, many of which came into effect on Jan. 1, 2006.
The guidance responds to a number of operational issues that arise under the new law, including: continuing compliance with TRIA's mandatory availability and policyholder disclosure requirements; determination of the types of property and casualty insurance now included and newly excluded from TRIA; and how the newly enacted program trigger for the federal share of compensation will work.
This interim guidance, along with regulations issued by the Treasury Department from July 11, 2003, through June 14, 2005, can be used by insurers in complying with the new statutory requirements and will remain in effect until superseded by subsequent regulations or guidance. Regulations, interim guidance notices and other information related to the Terrorism Risk Insurance Program can be found at www.treasury.gov/trip.
Source: United States Department of the Treasury news release
Posted: Tuesday, January 03, 2006 12:00:00 AM. Modified: Tuesday, July 24, 2012 1:20:00 PM.
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