Help Ensure the Availability of Terrorism Insurance

The Senate Banking Committee recently voted 20 to 1 to extend the Terrorism Risk Insurance Act (TRIA) for seven more years.  On September 19, the U.S. House of Representatives voted by a margin of 312 to 110 to extend TRIA for an additional 15 years.  Final votes on this legislation will likely occur in both the House and Senate within the next few weeks—and your help is needed.  

Many experts have pointed out that the insurance industry has no way to adequately underwrite this risk because insurers and modeling firms cannot predict the frequency of potential terrorist attacks.  In addition, reinsurance capacity for terrorism is extremely limited.  Reinsurance Association of America (RAA) President Frank Nutter testified before Congress in June that RAA believes that for the foreseeable future, there will continue to be a shortage of reinsurance capacity for terrorism coverage because the magnitude of potential losses would otherwise put their solvency at risk.  The only alternative is for primary insurers to partner with the federal government to manage this risk so that terrorism risk insurance remains available for current and future policyholders.

Congress and the Bush administration correctly recognized the need for a public-private partnership on terrorism risk insurance following September 11, 2001, and again when they extended the program for two years in December 2005.  With the Terrorism Risk Insurance Extension Act of 2005 set to expire on December 31, 2007, securing a long term solution to managing terrorism risk is a top federal legislative priority for The Hartford and for the insurance industry.

TRIA legislation continues to enjoy bi-partisan support in the Congress.  The Bush administration, which has previously noted its opposition to a long-term extension, has stated that it would not oppose the Senate version that has emerged from the Senate Banking Committee.

But the battle for TRIA’s extension isn’t over yet.  Senators need to hear from their constituents, especially those who sell this important insurance coverage in their states, up until the final vote occurs.

Make sure your senators hear from you.  Please consider logging on to the Insure America Against Terrorism Web site today. Complete the requested information under the “Act Now” section of the site in order to send e-mails to your senators.  Do your part to ensure a long-term extension of TRIA so that current and future policyholders will have the coverage they need.