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November 11, 2005 at 07:00 PM
Despite Bush administration hostility toward the idea of adding group life to the Terrorism Risk Insurance Act, a Republican-led House panel may consider a TRIA extension draft that will include protection for group life insurers. [@@]
Staff members at the House Financial Services Committee talked about the possibility of including a group life provision while sharing a summary of the new TRIA extension draft with insurance groups.
The new TRIA draft would take a so-called “silo approach” to running the federal terrorism reinsurance program.
Under the silo approach, TRIA reinsurance program deductibles would vary depending on the line of insurance. The covered lines would include workers’ compensation, property, casualty, and “NCBR” coverage, which would protect against nuclear, chemical biological and radiological risks.
The new extension draft also would establish sliding scales for the co-payments insurers would have to make and for the size of an event necessary to trigger government involvement.
Under the proposal, co-payments for insurers would range from 20% for an event causing $10 billion or less in insured damage to 5% for mega-disasters causing more than $40 billion.
The trigger for the first year of the extension would be $50 million in insured losses, up from the current $5 million, and increase to $100 million in the second year. For any year beyond that, the trigger would increase by $100 million.
