Industry welcomes Senate TRIA approval
The US Senate has reauthorised the Terrorism Risk Insurance Act (TRIA) for the next six years, following months of uncertainty.
The bill, which cleared the House of Representatives on Wednesday, January 7, was passed on a 93-4 vote. The bill will now go to the President Obama to be signed in to law.
Rating agency Standard & Poor’s (S&P) welcomed the reauthorisation of TRIA, saying that it should address concerns about market disruption. However, it could present challenges for smaller commercial insurers.
“In particular, the increase in co-insurance could raise the exposure of those that are already overexposed by terrorism risk. At the same time, the industry may still find it difficult to manage nonconventional attacks reliably,” said S&P.
Insurers have welcomed the news of the renewal of the government backstop.
Peter Hancock, AIG president and chief executive officer, said: “AIG is pleased that Congress has approved legislation to reauthorise TRIA, an important line of defence against the crippling effects terror is meant to have on our society; the enactment of this legislation will remove an economic uncertainty for our customers, their employees, and US businesses in general.”
Willis added: "Willis is pleased that Congress has taken definitive action in passing a reinstatement of TRIPRA. This legislation should now provide long term stability for policy holders and insurers alike, and support the gradual transition into a broader market-based solution."
