Remembrance and Resilience

It’s hard to believe it’s been nearly a quarter-century. Twenty-four years ago this morning, our world changed. As we pause to remember those lost and the bravery and sacrifice of our first responders, I hope we can also reflect on the resilience and the sense of community our nation found in the days that followed.

Our industry, too, was changed forever by the 9/11 attacks. Suddenly, we were faced with a massive potential risk that – for national security reasons – we simply could not measure, and therefore, could not help policyholders protect themselves. At the same time, lenders and real estate developers demanded coverage against potential attacks. The impasse was estimated to have delayed or cancelled $21 billion in real estate transactions and cost 300,000 construction jobs, and if unaddressed, would have threatened our national economy.

The solution was the Terrorism Risk Insurance Act, which passed with bipartisan support and became law in 2002. That legislation established a public-private partnership that provided the certainty companies needed to offer affordable coverage for terrorism losses while also ensuring it wouldn’t be at the expense of taxpayers. Losses from terrorism above certain thresholds would be covered on the front end by the government – beyond a company deductible –then paid back over time with interest. It may be the most effective and efficient program in government history, fostering significant construction and economic development over the past two decades … at virtually no cost. NAMIC has been and continues to be a champion for its reauthorization.

TRIA is set to expire at the end of 2027, and Congress is – somewhat astonishingly – getting an early start on reauthorizing it with a hearing next week.. Liz Heck, president, CEO, and chairman of Greater New York Mutual Insurance Company and NAMIC’s immediate past chair, will testify on behalf of our association. She brings not only expertise as the CEO of an insurer but the personal experience as a New Yorker whose home was destroyed in the attacks. Her story is a powerful reminder of what happened that day, and her testimony will explain why TRIA is as important today as it was when it was created.

Our work continues on other fronts as well. Just one day after the TRIA hearing, NAMIC will participate in a roundtable discussion with Republican members of the House Financial Services Committee on the future of the Federal Insurance Office. FIO was created in the wake of the 2008 financial crisis as a resource for lawmakers when they consider insurance-related issues. Instead, it has become a political cudgel that has sought to expand its reach and abuse its authority to impose a political agenda. NAMIC will help those lawmakers understand that, at best, FIO has largely duplicated the work already being done by state regulators, and, at worst, has tried to encroach on state authority – all at great expense.

We see other parts of the government being re-examined as well. Just recently, the House Transportation and Infrastructure Committee sent NAMIC-supported legislation to the House floor that, if passed, would revamp the Federal Emergency Management Agency to be more effective and accountable. The Fixing Emergency Management for Americans Act would return the agency to a cabinet-level role answering directly to the president, reform aid programs to provide help to victims more quickly and implement modern building policies to reduce risk.

While the committee was considering Congress’ plan for FEMA, Tony Cotto, NAMIC’s assistant vice president and counsel of federal and political affairs, was at the White House to discuss what the administration sees for the agency. The FEMA Review Council was established by the administration to dramatically reform the agency, including the National Flood Insurance Program, which was the focus of the Sept. 3 meeting. Cotto was able to offer perspective on the issues that have long troubled the NFIP and the challenges of flood risk when it comes to insurance. He expressed our association’s strong opposition to expanding NFIP to other perils – which some have proposed to encourage greater participation in the program – and instead urged the administration to focus its efforts on bringing a measure of actuarial soundness to the NFIP, educating consumers, and increasing investment in mitigation projects to prevent flood losses in the first place.

Issues like TRIA, FIO, and FEMA reform may not make the headlines coming out of Washington, but they are impacting our industry and your companies and policyholders across the country. When lawmakers don’t understand how the decisions they make affect insurance companies and state marketplaces, it is bad for everyone. So, we will remain steadfast in educating elected officials to prevent these bad outcomes.

Many of these issues – and potential solutions for them – will be important discussion points when we meet in San Diego for the 130^th Annual Convention. I will be moderating a discussion with CNN’s Van Jones and conservative columnist Scott Jennings.

For those of you who have already registered for the event, I look forward to seeing you in just a matter of weeks. If you haven’t registered, I invite you to join me and more than 1,700 of your mutual industry colleagues as we look at how the issues of the day develop into tomorrow’s headlines and what the future may hold for our country, our government, and our industry. I hope to see you there.