Failure to pass Tria irresponsible: Greenberg
Reinsurance leaders have reacted with disappointment to the revelation this week that the US Senate has failed to reauthorise the Terrorism Risk Insurance Act (Tria) this year – a fact that will cause disruption and uncertainty in the re/insurance industry – thanks to the actions of a single outgoing senator.
The renewal of Tria, widely anticipated to be completed this week, was stopped dead in its tracks by Republican Tom Coburn from Oklahoma. He objected to a part of the bill that created a semi-federal licensing programme for insurance agents, permitting them to sell across US state lines. Coburn wanted states to be able to opt out of that programme. He has also previously said that he believes the private market will find a way of covering terrorism risks and he sees Tria as effectively offering the industry a subsidy.
Evan Greenberg, the chief executive of ACE, said: “Congressional failure to approve the renewal of Tria legislation is deeply disappointing. It was simply irresponsible for our elected officials to adjourn without reauthorizing Tria. By letting Tria lapse, they have exposed our economy and our society to the threat of severe economic uncertainty in the event of a significant act of terrorism. I sincerely hope this is the first order of business for the new Congress.”
Others have reacted with surprise at the failure of Congress to pass the bill but have said they will attempt to provide solutions.
James Dover, senior vice president, war & terrorism, at Ironshore, said: “We at Ironshore are surprised that Congress did not reauthorize TRIA, which was important legislation to address today's terrorism realities. Ironshore will continue to offer a private market solution for terrorism insurance for our customers and brokers that goes beyond government certification or authorisation of terrorist events."
The bill was passed in the House of Representatives last week. Since the House has now left for its break, the bill had to be either accepted as it was or rejected outright. Congress will now need to reintroduce the Bill in both the House and the Senate in the New Year.
Senator Chuck Schumer, who had championed the bill, described the expiration of Tria as a potential economic disaster putting billions of dollars of projects and hundreds of thousands of jobs are at risk. With no terrorism coverage available, some large projects could be put on hold until the situation is resolved.
