NAMIC: House Should Take Up TRIA Extension Following Committee Passage

Congress should swiftly move to extend the Terrorism Risk Insurance Act by taking up legislation approved by the House Financial Services Committee today, according to the National Association of Mutual Insurance Companies.

“The public-private partnership created by TRIA helps ensure that terrorists will not be able to shut down the U.S. economy,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “Passing a long-term extension is vitally important to that economic protection, and the Financial Services Committee should be applauded for its decisive and bipartisan vote. NAMIC is strongly urging House leadership to act with equal speed.”

The program was established in 2002 as lenders began requiring terrorism coverage the market could not provide in the wake of the Sept. 11 attacks. Insurers in the program are required to keep terrorism coverage affordable, and in turn companies would be able to spread a percentage of their losses from a terrorist attack over several years. The federal government would provide up-front funding for a percentage of losses after companies pay a deductible, and that funding would be repaid by insurers with interest.

“Virtually every office building, arena or stadium, transportation hub or energy infrastructure built in the last two decades exists is in part because TRIA made insurance coverage available,” Grande said. “Untold billions in economic activity, and thousands of jobs, were made possible by the program, and at almost no cost to the taxpayers.”

NAMIC began the press for a long-term TRIA reauthorization when former NAMIC Board Chair Elizabeth Heck testified before the committee on the need for a swift, clean, and long-term extension for the program. Heck, who is also the president and CEO of Greater New York Insurance Companies, explained to lawmakers that given the forward-looking nature of insurance contracts, Congress would have to act swiftly to avoid creating uncertainty in the marketplace.

“Unlike natural disasters, terrorism has a human aspect that is adaptive and unpredictable,” she told committee members. “Wildfires do not change their paths to get around protective measures, tornadoes do not aim for population centers, and hurricanes do not change paths to target the most vulnerable communities. Terrorists can and will adapt to find vulnerabilities to maximize damage and casualties.”