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PIA Reaffirms Its Position on TRIA Renewal

The Senate recently held a hearing on reauthorizing the Terrorism Risk Insurance Act, and the House Financial Services Committee is expected to begin work on the issue soon...
May 7, 2014

The Senate recently held a hearing on reauthorizing the Terrorism Risk Insurance Act (TRIA), and the House Financial Services Committee is expected to begin work on the issue soon. PIA strongly supports a long-term reauthorization of the law and has endorsed Rep. Michael Grimm’s TRIA legislation that would ensure a straightforward five-year reauthorization, the TRIA Reauthorization Act (H.R. 508). Despite the well-publicized legal issues Rep. Grimm is currently facing, H.R. 508 has large bipartisan support with 89 cosponsors.

Meanwhile, House Financial Services Subcommittee on Housing and Insurance Chair Randy Neugebauer (R-Texas) is circulating a draft proposal (TRIM) among committee Republicans to reauthorize the program for just three years, with a host of significant changes.

The proposal calls for only a 3 year reauthorization that, among other things, phases-in a new program trigger for all non-nuclear, biological, chemical or radiological (NBCR) events, from $100 million to $500 million by 2017. This proposal does not appear to be in agreement with PIA’s position on TRIA reauthorization.

A bipartisan Senate TRIA reauthorization bill (S. 2244) introduced several weeks ago calls for a 7-year reauthorization and makes other changes that put more financial onus on insurance carriers, but are measured and gradual, being phased in over five years.

What It Means to Agents: PIA has serious concerns about the draft Neugebauer proposal. It has the potential to do more harm than good. As PIA members across the country can attest, the looming sunset of the current Terrorism Risk Insurance Program (TRIP) has led many carriers to issue contingent renewals for terrorism coverage or withdraw from the market totally. By only re-authorizing TRIA for a period of three years, TRIM does little to provide market stability. Producers and carriers will almost immediately be faced with the same uncertainty they are experiencing now.

TRIA has been so successful due to widespread industry participation, which would be undermined by the Neugebauer proposal, which has the potential to drive many small to midsized carriers out of the market. PIA will continue to advocate for a TRIA reauthorization that is straightforward and is consistent with our position.

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