The major insurance associations have sent a joint letter to House Financial Services Committee chairman Michael Oxley (R-Ohio) in support of the effort to extend the Terrorism Risk Insurance Act.
The text of the letter is as follows:
Dear Mr. Chairman:
The Terrorism Insurance Backstop Extension Act (H.R. 4634), recently introduced in the House, is an important demonstration of Congressional intention to act this year to extend the Terrorism Risk Insurance Act (TRIA). As you know, TRIA provides vital protection for our national economy by acting as a backstop for the private commercial insurance market. TRIA has helped stabilize the marketplace, guaranteed availability of terrorism insurance coverage for businesses of all sizes and types, and improved affordability of this coverage despite the very real, ongoing threat of a catastrophic terror attack in the U.S.
In order to preserve current market stability despite the continuing terrorism threat, it is essential that Congress take action this year to extend TRIA. Insurance policy renewals are being negotiated now for 2005 and most of these policies will have terms that run beyond the backstop’s current hard sunset date (12/31/05). In light of Treasury’s recent decision to extend the ‘make available’ provisions of the program for all commercial policies written during 2005, insurers and policyholders will be exposed during the part of the coverage term that that runs beyond TRIA’s expiration date.
This sequential mismatch between policy periods and TRIA’s scheduled expiration makes it absolutely critical that Congress act this year to extend TRIA beyond December 31, 2005. The commercial policyholder community, state insurance regulators, insurers, reinsurers, insurance brokers and agents, and many members of Congress on both sides of the aisle have been actively advocating that Congress act this year to extend the program. Although the industry has concerns with some aspects of the legislation, we welcome the opportunity H.R. 4634 provides to work with you, the bill’s sponsors and all interested parties to enact extension legislation this year. H.R. 4634 is a positive first step.
American Insurance Association
American Association of State Compensation Funds
Council of Insurance Agents and Brokers
The Financial Services Roundtable
Independent Insurance Agents & Brokers of America
National Association of Mutual Insurance Companies
National Association of Professional Insurance Agents
Property and Casualty Insurers of America Association
Reinsurance Association of America
The Surety Association of America
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