GlobeSt.com UPDATE: Insurance Execs Stress TRIA Importance

NEW YORK CITY-While the aftermath of Hurricane Katrina has kept Congress occupied, the Terrorism Risk Insurance Act of 2002 will still sunset on Dec. 31. Cosette R. Simon, senior vice president, government and industry relations, Swiss Re Life & Health America Inc., tells GlobeSt.com that even though time is winding down, she expects a two-year renewal will be put in place.

“Congress’ interest has been elsewhere, appropriately so,” Simon says. “While I wish it [Hurricane Katrina] didn’t happen, it’s a real-life example of why TRIA is needed. Insurers haven‘t priced for terrorism. We‘re there to pay for floods, hurricanes, not for the unpredictable.”

In a white paper, Swiss Re stressed the importance of renewing TRIA. And the Coalition to Insure Against Terrorism was among those groups testifying before Congress over the summer to stress the importance of renewing TRIA. This was in response to a June 30 US Department of the Treasury’s report which concluded that the insurance industry is now capable of providing terrorism insurance on its own.

“Timing is critical. We will have some sort of ‘Son of TRIA,’” Simon adds. “There’s just less time to build consensus.” Aspects of TRIA she says should be amended in a number of ways including upping the $5-million trigger, adding group life to the mix and including domestic acts of terrorism.

“There will be some tinkering around the edges. We hope that the trigger is upped.” She says adding group life is just “common sense. If you’re going to cover the building, you have to cover the people.”

For previous TRIA coverage, click here.Two companion bills seeking to extend TRIA are currently before the House of Representatives and the Senate.

“No one says it hasn’t accomplished what it set out to do. That’s quite rare,” Simon notes, adding that the real work toward finding a permanent solution will occur after any renewal.