WASHINGTON–Renewal of the federal Terrorism Risk Insurance Act drew expressions of support at a House Financial Services Subcommittee hearing yesterday, but how long that extension should last was debated.
Rep. Paul Kanjorski, D-Penn., the chairman of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprise, acknowledged a strong need to extend the TRIA program beyond its current deadline of the end of the year. However, he proposed extending the program for six-to-eight years–a far shorter period than that recommended by other lawmakers.
Mr. Kanjorski said that Congress should recognize the “delicate balance” between providing security and spurring the industry to provide the coverage.
Rep. Gary Ackerman, D-N.Y., was among those calling for greater extension, arguing that an extension of less than 15-to-20 years would be “insufficient.”
If the committee were to approve Rep. Kanjorksi's proposal, he said, the shorter extension would “almost certainly be compromised” as the House negotiated a final bill with the Senate.
Other lawmakers, including Rep. Gregory Meeks, D-N.Y., said that any extension should run for ten years, although he added that “15 would be better.”
Witnesses appearing before the panel, including those representing the American Insurance Association and the Property Casualty Insurers Association of America, sought a greater extension, responding to a question form Rep. Carolyn Maloney, D-N.Y., that any extension should last at least a decade.
Joseph Ditchman, appearing on behalf of the Coalition to Insure Against Terrorism, said that it would be “wonderful” to have an indefinite extension, and called for extending the program for at least 15 years.
The issue, they said, is that while the government would like the private market to develop its own mechanism for dealing with terrorism risk, it does not appear that it will ever happen.
“I don't see anything on the horizon,” said Brian Dowd, chief executive officer for ACE North America, appearing on behalf of the American Insurance Association.
Vincent Donnelly, president and CEO of PMA Insurance Group, appearing on behalf of the Property Casualty Insurers Association of America (PCI), said that while Congress needs to establish a long-term extension to the program, it should also change it to ensure that small and medium-sized companies can participate in the TRIA program.
Already, he said, the current program's trigger level of $100 million exceeds the total capital of many smaller and medium-sized companies. “In effect, TRIA provides no protection” for these companies, he said.
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