NAMIC Hails Senate Vote to Protect Economy from Terrorism

WASHINGTON, July 17, 2014 /PRNewswire-USNewswire/ -- Legislation passed by the Senate will help prevent long-term economic damage from terrorist attacks by ensuring that insurance coverage for acts of terrorism remains available and affordable, the National Association of Mutual Insurance Companies said today.

"Today's vote is an important step toward keeping in place the vital protections for the American economy that the Terrorism Risk Insurance Program provides," said Charles M. Chamness, president and CEO of NAMIC. "The overwhelming, bipartisan support we've seen for this reauthorization demonstrates how much it has done for our nation, and how important it is to our economy."

Created in the wake of the Sept. 11, 2001, terrorist attacks, the Terrorism Risk Insurance Act established a program designed to resolve the impasse created as lenders for commercial development began to require terrorism insurance coverage that insurers could not underwrite. The program requires participating companies to offer terrorism coverage at affordable rates, and provides a federal mechanism through which the country can spread the losses out over time. It is currently set to expire at the end of the year.

"Before TRIA, the risk of terrorism and the lack of available coverage ground commercial development almost to a halt, costing billions of dollars and thousands of lost jobs," said Jimi Grande, senior vice president of federal and political affairs for NAMIC. "Now, more than 60 percent of companies in the United States have coverage in place, and major construction and development continues to take place across the country."

Recognizing the unmitigated success of the current program, the Senate legislation makes only slight adjustments to help further limit any potential impact on the taxpayers. This is in contradiction to the TRIA legislation awaiting a vote in the House, which would drastically increase the trigger level at which federal involvement would activate and could force many regional or smaller insurers out of the program.

"TRIA has been an unquestioned success in creating a competitive private marketplace for terrorism insurance, fostering continued development and economic growth in cities and towns across the country for the past decade," said Chamness. "But the program only works because it provides an element of certainty for companies writing commercial lines of insurance and their policyholders. Raising the trigger level, as the House bill does, threatens to undermine the program by making it too risky for many insurance companies. We applaud the Senate for working on bipartisan legislation that maintains a competitive marketplace by ensuring companies of all sizes can participate."

Matt Brady
Director, Federal Public Affairs
[email protected] 
202.580.6742

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SOURCE National Association of Mutual Insurance Companies