Pryce Welcomes Reforms to TRIA Extension

July 31, 2007

Pryce Welcomes Reforms to TRIA Extension

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, released the following statement after the full committee’s markup of H.R. 2761, the Terrorism Risk Insurance Revision and Extension Act, sponsored by Representative Michael Capuano (D-MA):

“We all agree that TRIA has served an important role in helping America’s insurance industry regain its financial footing in the wake of September 11th, 2001, and that it should be extended. Thanks in large part to TRIA, the terrorism insurance marketplace continues to strengthen, expand, and manage an increasing level of exposure .”

“I am also encouraged by the Committee’s acceptance of important market reforms to protect regional and small insurers, to allow for nuclear biological chemical and radiological coverage free from government price controls, and to adopt sensible tax treatment of long-term terrorism reserves. Such market reforms to TRIA will allow private sector capacity for terrorism insurance to continue to increase.

“I remain concerned, however, with the duration of the TRIA extension. A ten or fifteen year extension fails to force the hand of Congress to routinely reassess the effectiveness of the program. I will continue to push for a responsible duration that will provide an opportunity for Congress to amend the underlying program amid a growing terrorism insurance market and evolving terrorist threat.”

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.

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.

Back to Press Releases 2007