SENATE APPROVES TERRORISM BACKSTOP EXTENSION
House bill still pending; Big “I” pleased with ongoing progress
WASHINGTON, D.C., Nov. 18, 2005—Senate approval of language extending the federal terrorism backstop is a big step forward, says the Independent Insurance Agents & Brokers of America (the Big “I”).
A new backstop is needed to help insure against catastrophic terrorism losses in place of the Terrorism Risk Insurance Act (TRIA), which expires Dec. 31. The bipartisan Senate compromise is the product of months of work, a process led by Banking Committee Chairman Richard Shelby (R-Ala.), Sen. Christopher Dodd (D-Ct.), Sen. Robert Bennett (R-Utah) and Sen. Paul Sarbanes (D-Md.).
“The passage of this language really moves the process forward,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations. “We are very hopeful that the House will approve its legislation very soon, and then it is a matter of reconciling the language to produce unified legislation. We are very confident that an extension can make it through Congress and to the President’s desk before TRIA expires.”
The Senate bill sets the floor for “triggering events” at $50 million in 2006 and $100 million in 2007. It also requires that insurers make coverage available to policyholders in all lines covered by the program, and sets individual insurer retention levels at 17.5 percent of premiums collected in TRIA-covered lines in 2006 and 20 percent of such premiums in 2007.
The Big “I” has consistently supported the continuation of the current terrorism insurance backstop or a modified one, and it has noted in testimony before Congress that action is needed as soon as possible, since businesses and insurers are starting to make decisions that impact operations beyond the expiration of TRIA.
The Big “I” also notes that the availability and affordability of terrorism insurance is a business customer problem throughout the nation. In fact, take-up rates under TRIA have continued to grow across the country, and IIABA members have seen terrorism coverage purchased by a variety of interests, from small towns in Mississippi to small and large businesses in New York City.
“By creating reasonable triggering levels and deductibles, these parameters avoid the potential for devastating consequences on smaller businesses and our members, and for the economy of Main Street America,” says Brendan Reilly, director of federal government affairs. “Our members are pleased with the forward progress, and we look forward to working with the House toward a unified bill that can pass both chambers and become law.”
Founded in 1896, IIABA (the Big “I”) is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.
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