While some narrowing of the current government backstop on terror coverage remains possible, it now looks more likely that TRIA will be renewed in some form, insurer trade groups suggested last week.
Following two weeks of disappointment over Treasury's June 30 report, and urgent statements delivered in the wake of London terror blasts underscoring the need for TRIA renewal, the groups saw a change in tone from the Bush administration when Treasury Secretary John Snow testified at Congressional hearings.
The Council of Insurance Agents and Brokers, in a report to members prepared after the House Financial Services Committee hearing on Wednesday, said Sec. Snow's “verbal testimony today and response[s] to questions [were] extremely conciliatory and almost completely at odds with the utterances of Treasury officials in the past two weeks, at least in tone. “
The National Association of Mutual Insurance Companies had a similar view. In a memo to members, David A. Winston, NAMIC federal affairs senior vice president, lauded Sec. Snow for acknowledging that the TRIA program has worked to date and has thus far cost the U.S. taxpayers “zero.”
Mr. Winston added, “NAMIC is very pleased with this hearing and looks forward to working with the Congress and Treasury to get legislation enacted this year.”
“We are encouraged by Chairman Michael Oxley's commitment to deliver a bill and get it to the House floor by the end of this year. We agree with his statement that it 'would be the height of irresponsibility to allow TRIA to expire.'”
The Coalition to Insure Against Terrorism, which represents industry and is headed by the real estate investment industry, cited comments by Sec. Snow that “no one here is talking about ending the program.” The CIAT also noted that the secretary spoke of using the existing act as a model, while moving toward greater private sector responsibility.
The CIAT reported that Sec. Snow made it clear that “revamping–not terminating–the backstop” characterized this activity as making a good program better, and suggested an extension of two years.
Insurance industry officials caution that the shape of the legislation may not be known until mid-November because of the press of other business.
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