Matheson Calls for Extending Terrorism Risk Insurance
Wednesday, July 13
Washington DC-Congressman Jim Matheson today joined a bipartisan call for extending the Terrorism Risk Insurance Act (TRIA) to backstop the insurance industry, saying that the private sector isn't ready yet to take on the entire burden of insuring companies against acts of terror. Matheson is a member of the House Committee on Financial Services which held a hearing on TRIA today.
Matheson and others in the Blue Dog Coalition recently wrote to House Speaker Dennis Hastert, expressing strong support for passing an extension of TRIA, which is set to expire this year.
"When TRIA was initially passed, it was our clear hope that the private sector would find an effective and independent way to price and make available terrorism insurance. Unfortunately, the market has not yet established to the point where this is possible and we must act quickly to extend TRIA, before the market experiences significant disruptions," the letter states.
Passed in 2002 to stabilize the property and casualty insurance market after the Sept. 11th attacks, TRIA requires the government to cover 90 percent of terrorism-related losses-up to a total of $100 billion-once insured losses reach certain levels. Insurers are required to offer terrorism coverage to commercial policy holders in return for the government backstop. Treasury Secretary John Snow recently recommended that Congress not extend the terrorism insurance backstop in its current form.
"The recent terrorist attacks in London are a stark reminder that urban centers are particularly at risk. It's hard for companies to do business as usual under these circumstances and I think it's a reasonable role for the federal government to play," said Matheson.