WASHINGTON–Sen. Mark Warner says Congress should consider reauthorizing the Terrorism Risk and Insurance Act for 10 years or longer because it is in the long-term economic interest of the nation.
Speaking the morning of April 18 during Independent Insurance Agents & Brokers of America Legislative Conference and Convention here, Warner says recent terrorist bombing of the Boston Marathon demonstrates the need for the extension of TRIA.
He says there are incidents in the world today which “no amount of actuarial studies” will support the underwriting of terrorism insurance for the construction industry. To ensure the nation's economic progress he says, “We have to have that kind of protection on the books.”
“Count me as one of those who will advocate for that on the Senate Banking Committee,” says the senator, a Democrat from Virginia.
TRIA expires at the end of next year, but Warner says now is the time to begin discussing reauthorizing the program. He urged agents when visiting their elective legislative representatives on Capitol Hill to emphasize that extending TRIA “is in the long term economic interest of the country.”
Congress authorized the backstop program shortly after 9/11 at the urging of the business community as it became increasingly difficult to secure the liability coverage to protect construction projects in large cities.
The President and CEO of the IIABA, Robert Rusbuldt, in an interview after the senator's speech, says if TRIA is allowed to expire insurers are most likely to impose “major exclusions” in insurance policies for acts of terror.
“If you are writing anything, whether it is an NFL football team or an iconic property like the Empire State Building, or any small business in the building, or surrounding it, they will need terrorism coverage,” says Rusbuldt. Failure to renew the act “will have a ripple effect in the insurance marketplace and businesses of all sizes.”
He says he believes there will be “modifications” to the current authorization, but does not know what they will be. While some conservative Republicans believe there should be no government backstop, others in banking, real estate and construction “will be hit if TRIA is not passed in some manner.”
“It is way beyond the insurance industry,” he says. “It is a major economic issue for our country.”
In a statement issued today in response to Warner's comments, the American Insurance Association says it supports reauthorization of the program and will work for bipartisan support for its passage.
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