WASHINGTON, D.C., June 19, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) strongly supports the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA), introduced Monday by Rep. Michael Capuano (D-Ma.) and House Financial Services Committee Chairman Barney Frank (D-Ma.).
An extension of the federal terrorism insurance backstop is needed to help insure against catastrophic terrorism losses in place of the Terrorism Risk Insurance Extension Act (TRIEA), which expires at the end of the year. The bill extends the needed federal backstop on a long-term basis to help insurers cover catastrophic terrorist acts and further develop market capacity.
“The Big ‘I’ commends Rep. Capuano and Chairman Frank for introducing this bill that will continue to keep terrorism insurance coverage both available and affordable. The Big “I” also thanks Ranking Member Spencer Bachus and Subcommittee Chairman Paul Kanjorski for their leadership on this important issue,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations. “With the current program expiring at the end of the year the need to act quickly is imperative in order to bring certainty to policyholders, insurers, and the insurance market as a whole.”
The Big “I” 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 to the largest cities. IIABA does not want its business customers to be in a position of insurers being forced to exclude terrorism coverage, or insurers unable to write certain commercial coverage altogether in some states that do not allow exclusions for terrorism coverage. IIABA’s focus is on insurance consumers, and it knows that many of the business customers of independent agents need this coverage.
“It is very important that this bill recognizes the potential for terrorist attacks to take place at any place and any time, and puts forth reasonable trigger levels that ensure that the terrorism insurance program will protect large and small communities alike across America,” says Symington.
In addition to extending the federal backstop on a long-term basis with reasonable trigger levels, the bill would help to ensure full coverage from catastrophic terrorist attacks by including coverage for nuclear, biological, chemical and radiological (NBCR) events. The Big “I” supports a reasonable mechanism to include NBCR coverage in the program that recognizes both customers’ need for such insurance and insurers’ difficulty in underwriting such exposures. TRIREA would further strengthen the terrorism risk insurance program by eliminating the distinction between foreign and domestic acts of terror.
The bill would also create a 15 member blue-ribbon commission to propose long-term solutions to covering terrorism risks. The Big “I” strongly supports this approach and is pleased that the views of independent insurance agents and brokers will be represented on the commission.
“The Big ‘I’ has consistently supported the continuation of a terrorism insurance backstop in order to protect our business customers and their employees,” says Jason Spence, Big “I” assistant vice president of federal government affairs. “At this time, there is still no viable market for terrorism insurance, so we need to have a way to protect the businesses of America, our workforce, and the economy of our nation. The Big “I” looks forward to working with the Financial Services Committee, House leadership, and the Senate in the months ahead to pass this important legislation.”
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.