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Greenberg: Private Insurers Better than TRIA

Former AIG Chairman Maurice “Hank” Greenberg made some news when he gave a speech at the National Press Club in Washington last week...
February 27, 2013

Former AIG Chairman Maurice “Hank” Greenberg made some news when he gave a speech at the National Press Club in Washington last week. The Chief Executive Officer (CEO) of Starr Insurance Holdings and chairman and CEO of C.V. Starr & Co. said the private insurance market could stand to benefit if the federal government got out of the terrorism risk insurance business.

Greenberg was referring to the Terrorism Risk Insurance Act (TRIA), which Congress passed in the wake of the attacks of Sept. 11, 2001 to provide a federal backstop for commercial property/casualty insurers writing terrorism risk coverage. TRIA is set to expire in 2014, but this month legislation was introduced in the House that would extend the program through 2019. Greenberg said he was only speaking for himself, adding, “We shouldn’t let the program expire without hearing from the industry as a whole.” Much of the industry as a whole – including PIA – is on record supporting the extension of TRIA.

Comment from PIA’s Pat Borowski: “I find these statements misguided. You need to realize that Greenberg goes on to greatly qualify his comments, i.e., that the federal government should get out of insuring terrorism risk so that private sector can write what it wants and what it can, at sound rates. But then he adds that won’t be everything, because of lack of capacity. Well, that is exactly the reason TRIA was created!”

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