Pryce Encourages Greater Bipartisanship in TRIA Extension Legislation at Subcommittee Hearing

June 21, 2007

Pryce Encourages Greater Bipartisanship in TRIA Extension Legislation at Subcommittee Hearing

Washington, DC – Congresswoman Deborah Pryce (R-OH), Ranking Member of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises of the House Financial Services Committee, stressed the need for greater consensus in crafting legislation to extend the Terrorism Risk Insurance Act (TRIA) at a Capital Markets Subcommittee hearing today.

Pryce lauded the continued legislative progress on extending TRIA, but expressed her concern that the legislation under discussion -- the Terrorism Risk Insurance Revision and Extension Act – did not include needed language that protected American taxpayers and incrementally decreased the federal role in terrorism insurance. These provisions ensured strong bipartisan support for previous versions of the bill in the House and Senate.

“TRIA has been a proven success, and has helped to create a healthier insurance market in the wake of 9/11,” said Pryce. “However, this legislation fails to deliver a TRIA extension that embraces a responsible duration, a decrease in taxpayer financial exposure over time, and market reforms that increase insurance capacity.”

“Last Congress, Members on both sides of the aisle voted for a program that decreases the federal role each year in funding the terrorism backstop. Discarding past bipartisan agreements on this issue, the bill before us today sends the wrong signal.”

Today’s hearing, entitled, “Examining a Legislative Solution to Extend and Revise the Terrorism Risk Insurance Act” assessed HR 2167, the Terrorism Risk Insurance Revision and Extension Act of 2007, sponsored by Representative Michael Capuano (D-MA). Last Congress, the House overwhelmingly passed a bipartisan extension of TRIA, but the Senate failed to act upon the House bill, and instead passed a limited extension.

TRIA was created in the wake of the September 11, 2001, when America suffered $32 billion in insured losses. It was enacted as a temporary backstop to ensure the availability of terrorism coverage and provide a transitional period for insurers to rebuild their surplus, model and diversify their terrorism risk exposure, and develop new policy forms charging for terrorism risks. Insurers’ surplus is now at record levels and most insurers have diversified their terrorism exposure. However, it remains difficult to price the likelihood or potential severity of a terrorist attack, and insurers remain reluctant to cover high level terrorism risks without a Federal backstop

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