RIMS, the risk management society™, commends Congressman Bennie G. Thompson (D-MS), the Ranking Member of the Committee of Homeland Security, for introducing the “Fostering Resilience to Terrorism Act of 2013” that would extend the Terrorism Risk Insurance Act (TRIA) for 10 years. TRIA, legislation that protects organizations’ ability to purchase sufficient insurance to cover acts of terrorism, is set to expire on December 31, 2014.
In February, RIMS expressed its support for sponsors who introduced a bill to extend TRIA for five years. And, in September 2012, former RIMS President Janice Ochenkowski delivered testimony on behalf of the Society at the first hearing held by the United States House of Representatives, Subcommittee on Insurance, Housing and Community Opportunity. The testimony addressed the best strategies for extending the Terrorism Risk Insurance Act.
“RIMS has been a longstanding advocate for the reauthorization of TRIA and we are encouraged to see our leaders in Washington realize the importance of this Federal backstop that provides critical financial assistance to businesses affected by acts of terrorism,” said Carolyn Snow, RIMS Board Liaison to the Society’s External Affairs Committee. “It’s now up to Committee leaders to hold a hearing and acknowledge this issue before it’s too late. Failure to do so, will result in potentially damaging gaps in insurance coverage, leaving countless businesses exposed.”
Congressman Thompson released the following statement introducing the bill:
"The Boston Marathon bombings last month serve as a stark reminder that terrorism and mass violence remain both a homeland security and economic threat. If TRIA is allowed to expire next year, there may be fewer insurers offering terrorism insurance and prices potentially could increase. By extending this program for 10 years, we will ensure much-needed stability and predictability for the business community."
RIMS supports the following principles in development of a long-term solution for TRIA:
· Without a TRIA-type program, many entities will simply be self-insured due to lack of availability or affordability of coverage or both - leaving their companies and their workers exposed to an event that could bankrupt the company.
· The new program should ensure an orderly and efficient response to minimize any market disruptions and ensure benefits are available to any victims - individuals or companies – from a catastrophic loss scenario.
· A private and public partnership provides the best alternative to addressing the long-term needs of availability and affordability of insurance to cover acts of terrorism.
· The solution needs to address the long-term availability and affordability of insurance coverage for nuclear, biological, chemical, and radiological events caused by terrorism.
· All commercial property, workers’ compensation, auto and general liability lines should be included in any new plan.
· Insurance companies writing commercial lines should be required to participate in the program and be required to make coverage available for acts of terrorism.
· Tax incentives and eligibility for participation in the program should be considered to encourage creation of private insurance capacity.