INDIANAPOLIS, Dec. 17, 2014 /PRNewswire-USNewswire/ -- The National Association of Mutual Insurance Companies expressed dismay at the adjournment of Congress without passage of legislation to reauthorize the risk-spreading program created under the Terrorism Risk Insurance Act. The TRIA program is set to expire on Dec. 31.
"TRIA provides an essential element of certainty and security to our economy against the unknowable threat of terrorism, and the country needed the program's reauthorization," said Charles M. Chamness, president/CEO of NAMIC. "TRIA has helped foster continued economic growth and development in cities and towns across the country, and its expiration puts at risk an already fragile economy."
The Senate was poised to vote on a House-passed bill that would have extended the program for six years but could not get unanimous consent to limit debate over the objections of Sen. Tom Coburn, R-Okla. Coburn has had a long-standing objection to the provision included in the bill that would have set up the National Association of Registered Agents and Brokers. Rather than commit the three or four days needed to bypass his objection, the Senate instead decided last night to adjourn for the year. With lawmakers now at home, few options remain for legislation that reauthorizes TRIA to make it to the president's desk for signature.
"We are incredibly disappointed in Congress. There is no good reason that a program so vital to our nation's economy be allowed to lapse," Chamness said. "The country deserved better. We have 14 days left until the program expires; if they won't return on their own, the president should call them back to town to finish their job."
With the expiration of the program, there will likely be a tightening of insurance markets and terrorism coverage exclusions in commercial insurance policies will go into force. This could lead to many commercial financial covenants and loans going into technical default.
"People have been asking what will happen now that TRIA is set to expire and we have to tell them it's not clear. And that's exactly the point," Chamness said. "The whole purpose of TRIA was to provide stability and certainty to the market, and Congress has now done the opposite. The industry will have to spend the holiday season scrambling to get notices out to policyholders, re-evaluating its risk, and seeking other remedies."
Matt Brady
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SOURCE National Association of Mutual Insurance Companies
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