RIMS TESTIFIES AT SENATE COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS HEARING REGARDING THE EXTENSION OF TRIA
Society Pushes for a Long-Term Solution to TRIA as Expiration Looms
NEW YORK (February 25, 2014) – RIMS President Carolyn Snow was invited to testify before the Senate Committee on Banking, Housing and Urban Affairs’ hearing entitled, “Reauthorizing TRIA: The State of the Terrorism Risk Insurance Market, Part II” in Washington, D.C. Representing RIMS’ 11,000 risk practicing members, her testimony described the current state of the terrorism risk insurance market; the role TRIA currently plays in the market; and the Program’s features that are designed to protect workers, communities and taxpayers.
In her testimony that outlines the advantages of reauthorizing TRIA prior to its expiration on December 31, 2014, Ms. Snow states:
“Since its inception, TRIA has allowed our member organizations to obtain such coverage at affordable rates. Prior to that, after 9/11 our members were unable to obtain such coverage, which jeopardized many contracts that contained covenants to carry terrorism insurance. For this reason it is vital that the program be extended.
“We believe that the availability and affordability of adequate insurance coverage for acts of terrorism is not only an insurance issue, but an economic one…By providing a backstop and assuming some of the market terrorism risk as a reinsurer, the federal government has freed up capacity in the private market that would not otherwise exist. This capacity can then be made available to the consumer at affordable prices, which we have seen in the current marketplace.”
RIMS continues to support 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.
To view the full testimony, click here.