An insider’s perspective on insurance-related topics including Terrorism Risk Insurance Act, state vs. federal regulation and tort reform was given by U.S. Congresswoman Sue Kelly, R-N.Y., vice chairman of the House Financial Services Committee during a May 6 presentation on “The View From the Hill,” at NCCI Holdings Inc.’s Annual Issues Symposium 2005 in Orlando, Fla.
Kelly is in her sixth term representing the 19th Congressional District of New York. She began serving in 1995 and remains committed to a common sense agenda that includes reducing taxes, strengthening national security, improving veterans’ benefits, making healthcare more accessible and affordable, and improving education. She was an author of the Sarbanes-Oxley corporate reform bill.
Since 2001, Congresswoman Kelly has chaired the House Financial Services Oversight and Investigations Subcommittee, a leading force in improving the federal government’s ability to track and disrupt terrorist financing activities.
Kelly said it is urgent to renew TRIA and urged everyone attending NCCI’s symposium to become actively involved in contacting their representatives to let them know how important it is to renew this act before it expires at the end of the year.
“People need to understand how the absence of TRIA would cost every state,” Kelly commented in answer to a question about how critical the act is to the economy. “If TRIA is not renewed, all bets will be off!”
Kelly said that everyone needs to tell their regulators exactly how important TRIA is, not just to major states, like Connecticut, Illinois, New Jersey and New York, but every state. She said smaller states feel, “we’re fine,” terrorism would only affect major targets, but said they’re wrong.
She said that while there are some prime targets, if any target is hit, it will have a domino effect that would pull everyone down. “We have to take a long look at other effects,” Kelly explained.
Kelly said that after the World Trade Center bombing she talked to a woman who had a small kiosk in the building. “She had taken out a mortgage on her house to get the business going,” Kelly said. “After the bombing the bank threatened to foreclose the mortgage on her house, suppliers lost her business and her customers had to look for a supplier elsewhere.”
Kelly predicted if TRIA is not renewed, and if another terrorist attack occurs, it would pull the economy down everywhere because businesses won’t have anyone to buy their products, people lose their jobs and the result could affect every single person in every single state.
“God-forbid, if there is another terrorist event, the government has to be the insurer of first resort,” Kelly emphasized. “We need to work together to make sure that TRIA is passed so that people can stay in business.
“Every single person in every single state should contact their officials to make sure TRIA is renewed,” Kelly urged. “You are instrumental in making sure enough interest is generated about this and make sure they understand how they will be affected if it isn’t passed – take my passion into your own hearts and fight for TRIA!”
NCCI Releases workers’ comp analysis
Also on May 5, NCCI released the results of its 2004 State of the Line preliminary market analysis indicating that during the workers’ compensation calendar year combined ratio dropped four points to 105 percent, the best performance for the first time since 1997, according to NCCI Holdings Inc.’s State of the Line preliminary market analysis.
The accident year combined ratio continued the downward progression that began in 2000 and stands at 94 percent – the best performance in more than a decade. This reflects a 45-point improvement in just five years.
NCCI’s estimate of the private carrier loss reserve deficiency declined by more than $3 billion to about $12 billion. After allowing for the permissible discounting of lifetime pension cases, the deficiency is $7 billion. The estimated deficiency has been more than halved since year-end 2001, when NCCI estimates peaked. Claim frequency also continued in the current cycle of decline that began in the early1990s.
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