Terrorism Insurance Bill Containing Key Capuano Amendment Passes Financial Services Committee

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PRESS RELEASE

Terrorism Insurance Bill Containing Key Capuano Amendment Passes Financial Services Committee

September 29, 2004

Today the House Committee on Financial Services passed legislation extending the Terrorism Risk Insurance Act of 2002 (TRIA) for an additional two years. The bill contains an amendment offered by Congressman Mike Capuano (D-MA) that also makes terrorism reinsurance coverage available to group life insurance policies.

"As Congress works to extend this critical legislation, it is important that we not only protect bricks and mortar, but the men and women working in those buildings. That is why I added group life insurance policies to this bill," stated Congressman Capuano.

Legislation to extend terrorism insurance enjoys significant bipartisan support and passed unanimously in Committee. In addition to making coverage available to group life insurance policies, the legislation also:

Provides mandatory availability for terrorism coverage for the final two years of the program;
Protects taxpayers by increasing the deductible that insurance companies must pay in the event of an attack.

"TRIA has helped make terrorism insurance available and affordable to businesses. It is critically important that Congress extends this successful legislation so that American workers and our cities and towns continue to be protected against possible terrorist attacks," stated Congressman Capuano.

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.

Two years ago, 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. The full House is expected to consider this legislation in the weeks ahead.

Contact: Alison M. Mills (617) 621-6208