WASHINGTON, D.C., Feb. 28, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) today urged Congress to ensure availability of terrorism risk insurance through a continued federal government role and to examine long-term solutions before the current backstop legislation expires.
Tom Minkler, chairman of the Big “I” government affairs committee and an independent agent in Keene, N.H., testified before the Senate Committee on Banking, Housing and Urban Affairs. He commended the committee members and Congress for recognizing the importance of a federal role in terrorism insurance by enacting the Terrorism Risk Insurance Extension Act (TRIEA) of 2005.
“The current public-private partnership created by TRIA, and extended in TRIEA, has worked well, allowing businesses across America to continue operating and growing, and preserving jobs in the process,” Minkler testified. “These laws have saved our economy millions of dollars by making terrorism insurance broadly available to all businesses that want and need this coverage at virtually no cost to the federal government. Prices have come down, capacity has grown, and demand is up in many geographic areas.”
Minkler noted that the insurance market’s ability to protect the American economy from the financial consequences of terrorism risk is a critical component of national security during the ongoing war on terror. Minkler said that terrorism risk coverage would become inordinately expensive and probably unavailable to many businesses if the federal role lapses.
“TRIA is scheduled to expire on Dec. 31, 2007, and there is no reason to believe that the threat of terrorism is on the decline, or that the private insurance markets alone can adequately meet our nation’s need for coverage,” Minkler said.
“We have seen that terrorism insurance coverage is not just a ‘big city’ or a ‘big business’ problem. It is a business customer problem throughout the country,” Minkler said. “As take-up rates have gone up across the country, we have seen terrorism coverage purchased by a wide and diverse variety of interests, from small towns in Mississippi to small and large businesses in New York City.”
Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations, pledges the Big “I” will keep working to secure a continued federal role in terrorism risk insurance.
“Congress did the right thing, and the smart thing, in 2005 by extending TRIA,” Symington says. “We appreciate its leadership on this issue. We hope that Congress will continue to show foresight and see that a federal role is essential to guard against terrorism risks—especially nuclear, biological, chemical and radiological attacks. We will keep working to ensure a long-term federal backstop is in place at the end of 2007.”
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.