Congress Debates Extending TRIA

Both the House and the Senate are considering legislation that would extend the Terrorism Risk Insurance Act of 2002. The act expires Dec. 31, 2005, creating possible coverage gaps in policies that extend into 2006. Federal Reserve Chairman Alan Greenspan provided impetus for the extension when he recently expressed doubts that the private market alone can work well enough to insure against the continuing threat of terrorist attacks.

“Catastrophic losses related to terrorist attacks continue to appear uninsurable, and we do not believe that a federal terrorism backstop should be allowed to lapse,” said Charles E. Symington Jr., senior vice president of federal government affairs for the Independent Insurance Agents & Brokers of America. It could be difficult, if not impossible, for businesses to obtain insurance against losses related to terrorist acts, and that could have serious economic consequences in the event of another terrorist attack on American soil.”