Reps. Capuano, Frank, Israel, Kanjorski, and Crowley Introduce Bill to Extend Terrorism Risk Insurance Program
Congressman Mike Capuano (D-MA) joined Reps. Steve Israel (D-NY), Barney Frank (D-MA), Paul Kanjorski (D-PA), and Joe Crowley (D-NY) in introducing the "Terrorism Insurance Backstop Extension Act of 2005 (H.R. 1153)" to reauthorize and extend the federal terrorism reinsurance provided by the Terrorism Risk Insurance Act of 2002 (TRIA).
"TRIA has helped make terrorism insurance available and affordable to businesses, particularly those in our major urban areas. We need to act now to extend the program while we work on long-term solutions to protect American workers and our cities and towns against possible terrorist attacks," stated Congressman Capuano.
"Over time, the market may evolve to the point where government-backed terrorism risk insurance will not be necessary. But until then, as we deal with this relatively new phenomenon of mass terrorism in the U.S. some role for the government is necessary," said Congressman Frank.
"It seems clear that if we are going to insure buildings we should insure the lives of the people within those buildings," noted Rep. Israel. "The insurance community lost $40 billion as a result of the 9/11 attacks over three years ago and the limited federal guarantee of such insurance is about to expire. That means insurance companies will simply stop writing policies that cover future attacks, banks will not finance real estate ventures and companies will be unable to insure their property or their employees. It is vital to our national and economic security that a federally guaranteed terrorism insurance program continues without an arbitrary deadline."
The legislation extends TRIA by two years, through 2007. Additionally, the bill:
A stable, secure insurance market is vital to the health of our national economy. Nearly three years ago, the stability of the insurance industry, and all of our nation's policyholders, was put in jeopardy when insurers and reinsurers lost more than $40 billion as a result of the 9/11 attacks. In response, reinsurance companies limited the availability of terrorism insurance, and insurers were unable to make it available, leaving many of our nation's businesses vulnerable to insupportable risk.
In 2002, Congress overwhelmingly passed TRIA to provide a limited federal backstop in the event of another catastrophic terrorist event. In doing so, lawmakers sought to ensure the availability of full coverage of the risk of terrorism for our nation's policyholders and to enable the insurance industry to recover from the losses they sustained in 2001. This legislation simply extends that federal backstop for a limited time while long-term solutions can be developed. The House Financial Services Committee unanimously passed similar legislation to extend TRIA for two years in 2004.
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