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PIA National Praises President Bush as Terrorism Insurance Bill Signed

WASHINGTON, November 26, 2002 - The National Association of Professional Insurance Agents (PIA National) today praised President Bush for his leadership in securing a terrorism...
November 26, 2002

PIA Attends White House Bill Signing Ceremony

WASHINGTON, November 26, 2002 - The National Association of Professional Insurance Agents (PIA National) today praised President Bush for his leadership in securing a terrorism insurance backstop bill. Bush signed the Terrorism Risk Protection Act of 2002 this morning in the East Room of the White House.

"President Bush's steadfast leadership on this important legislation has been exemplary," said PIA Executive Vice President Gary W. Eberhart, who attended this morning's bill signing ceremony in the East Room of the White House. "This bill is good for our country, good for the economy, and good for PIA members whose clients need available and affordable insurance."

President Bush embraced terrorism insurance as one of his primary legislative goals, campaigning for it regularly and making calls to individual lawmakers urging them to resolve differences.

"Today we're taking action to strengthen America's economy, to build confidence with America's investors, and to create jobs for America's workers," said Bush. "The Terrorism Risk Insurance Act will provide coverage for catastrophic losses from potential terrorist attacks.  Should terrorists strike America again, we have a system in place to address financial losses and get our economy back on its feet as quickly as possible."

The push for the bill began within days of the September 11, 2001 terrorist attacks in New York and Washington, D.C. and extended through 14 months of lobbying by PIA, a host of insurance industry interests and a broad coalition of business interests directly affected by the lack of available, affordable terrorism coverage.

Over the past year, PIA conducted a series of grassroots action campaigns to help move a terrorism insurance bill through Congress. The effort was a prime focus of PIA's March 2002 annual Federal Legislative Summit. In June 2002, PIA leaders met with Speaker of the House J. Dennis Hastert (R-IL) to reaffirm our support of the legislation.

"This legislation has been a priority for PIA since September 11, 2001," said PIA National President Carl G. Stoecklin. "PIA members from across the nation participated in a year-long campaign to secure passage of this measure."

"The lack of available, affordable terrorism insurance has adversely affected many of our members whose clients need this coverage," Stoecklin said. "This temporary backstop will provide the market stability necessary for carriers to again offer this coverage without seriously jeopardizing their solvency."

Under the bill, when the Treasury Secretary, in consultation with the Secretary of State and the Attorney General, certifies that a terrorist attack has occurred causing at least $5 million of insured losses, a federal backstop for terrorism insurance would come into effect. Before any federal assistance becomes available, companies will need to meet a deductible based on a percentage of direct written premiums for commercial U.S. risks. The federal government would then cover 90 percent of any losses above the individual company retention levels.

The backstop contains provisions requiring repayment by carriers, according to a formula, of losses covered by the federal government. The program will cover all commercial property-casualty lines, including workers' compensation and business interruption. The Treasury Secretary is empowered to extend the program to group life without the need for additional legislation, if a mandated study identifies a need.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses.