Discussions Remain About Post-TRIA Future

In 2005, the Big “I” was instrumental in the renewal of a modified federal backstop for terrorism insurance originally created by the Terrorism Risk Insurance Act (TRIA) of 2002. This event was a huge victory not just for Big “I” members, but also for the insurance market, American businesses and the country’s economy. If TRIA had expired Dec. 31, 2005, significant coverage for catastrophic terrorist attacks would have been unavailable because the marketplace for terrorism insurance had not fully developed.

Independent agents and brokers across America certainly can and should be grateful to Congress and President Bush for working to enact this much-needed extension, known as S. 467, the Terrorism Risk Insurance Extension Act of 2005. But the work is not yet over on this vitally important issue.

While the TRIA extension was a boon to the insurance marketplace and the national economy, the inescapable fact remains that immediately upon its enactment, the clock began to tick once again, just as it had with the original TRIA. Expiration now looms on Dec. 31, 2007, without any assurances that the market will be adequately prepared to assume the risks of potential terrorist attacks.

That’s why the Big “I” remains committed to a long-term solution for terrorism insurance and urges policymakers to work toward this goal beyond the expiration date of the new two-year stopgap measure. The national association also continues to work with interested parties in the public and private sectors to develop new solutions and with the U.S. Department of the Treasury to determine the continued necessity of a federal role in insuring against catastrophic acts of terrorism.

The Big “I” is taking part in a coalition of stakeholders in the insurance and policyholder communities to calculate the abilities and the constraints of the market and to help ensure that terrorism insurance is available and affordable after the federal legislation runs its course. The Big “I” government-affairs staff is working diligently to ensure that businesses can obtain future comprehensive terrorism coverage at affordable prices. The consequences of not making this coverage available and affordable could be devastating. It is from our unique vantage as the intermediaries between insurers and consumers that we do not believe we can afford, as an industry or as a nation, to risk such results.

As such, the Big “I” supports H.R. 4619, the Commission on Terrorism Risk Insurance Act of 2005, a bi-partisan bill introduced by Rep. Vito Fossella (R-N.Y.) and Rep. Carolyn Maloney (D-N.Y.). This bill would create a national commission on terrorism insurance comprised of 11 stakeholders. Through Big “I” efforts, an independent insurance agent and a broker would be part of the commission, which would review the existing program and make recommendations on the future of terrorism insurance prior to the act’s expiration in 2007.

It is crucial that terrorism insurance be available and affordable, and the Big “I” will pursue all solutions— in the private market or in the halls of government—that will help policyholders obtain this needed coverage. Big “I” agents ably advocated for a long-term solution when they visited the nation’s capital in April to meet with legislators during the Big “I” National Legislative Conference & Convention. Your continued advocacy is needed, so keep talking to your elected leaders and let them know why this problem will not be going away and must be addressed.

Cliston Brown (cliston.brown@iiaba.net) is Big “I” director of public affairs/media relations.

Front and Center
On April 21, the Big “I” submitted testimony to the President’s Working Group on Financial Markets regarding terrorism insurance. In this testimony, the association made clear the importance of a long-term solution to the problem of terrorism insurance coverage.

This was merely the latest in a series of Big “I” actions on the issue of terrorism insurance in the wake of the terrorist attacks of Sept. 11, 2001. IIABA was intimately involved in the passage of the original Terrorism Risk Insurance Act (TRIA) in 2002 and was also deeply involved in the successful efforts to extend TRIA prior to its scheduled expiration on Dec. 31, 2005. On many occasions, Big “I” agents have testified before Congressional committees, subcommittees and other special panels, and they have been a leading voice on behalf of all agents and brokers.

The Big “I” remains at the table because elected leaders in Washington recognize its credibility and its grassroots influence. With 300,000 agents and brokers and their employees in all 50 states and the District of Columbia—and the fact that the Big “I” Government Affairs staff is recognized as leading experts on insurance issues—our opinions and positions carry weight. You cannot adequately represent your members if you don’t have a seat at the table, and IIABA is always at the table.

You can help us continue to have influence with lawmakers by keeping active, reaching out to your elected representatives and contributing to InsurPac. So keep at it!