Fight to renew TRIA will be long and hard
While the insurance industry in the US is trying to build support and momentum to get the Terrorism Risk Insurance Act (TRIA) extended beyond 2014, the fight could be longer and tougher than the industry realises and its representatives must clearly and consistently demonstrate a need for it in the coming months.
That is the view of one senior figure in an insurance representative body speaking as the debate surrounding the issue starts to take shape. Last week, US Senator Charles Schumer, who represents the 16th District of New York, told the Treasury Department that renewal of TRIA will be one of his top priorities for this Congress.
But not all are convinced of its necessity and some senior figures in the industry fear it may not be renewed at all. Some senior politicians clearly remain unconvinced and Jeb Hensarling, chairman of the Finance Services Committee of the House of Representatives, has twice voted against TRIA re-authorisation.
“The industry and business community need to make the case that the programme is necessary before the committee will take up legislation. But there are no hearings scheduled and this will take a while,” said one source.
Those against the renewal of TRIA argue that the private sector should be able to able to provide enough capacity to insure the risk of terrorism without federal involvement. The likes of Schumer, however, have stated that TRIA is equal to flood insurance in importance to New Yorkers. He has argued the private market could not provide the capacity, at reasonable prices, to handle the risk.
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