Re/insurers await outcome as US legislators revisit TRIA
The re/insurance industry is watching developments in Capitol Hill this week, as US legislators revisit the Terrorism Risk Insurance Act (TRIA).
The TRIA was brought in largely in response to the events of September 11, 2011, which cost reinsurers billions. “The TRIA program does not require participants to pay premiums,” says Willis Towers Watson. “Instead, it uses a post-event recoupment mechanism. It is hence generally referred to as a federal backstop. This structure allows it to be less capital intensive and makes “pricing” more accurate than a reinsurance approach.”
A bill has been introduced in the US House of Representatives. The House Financial Services Committee is examining the issue.
Nat Wienecke, senior vice president, federal government relations at the American Property Casualty Insurance Association (APCIA) said: “We commend Chairwoman (Maxine) Waters, Ranking Member (Patrick) McHenry, and the House Financial Services Committee for making TRIA a top priority. APCIA and our members strongly support H.R. 4634, the Terrorism Risk Insurance Program Reauthorization Act of 2019, as amended. This bipartisan bill will provide for a seven-year reauthorization and ensures that the program remains in place, without disrupting the marketplace. We urge the Committee to come together and pass this bill and for the full House to then take it up quickly.”
“Critics of the program have continued to argue that by extending TRIA the government is prolonging the burden on taxpayers to benefit large organizations,” says WTW.
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