DePoy says with the current version of Terrorism Risk Insurance Act (TRIA) scheduled to sunset Dec. 31, CIAT started working as soon as the current Congress convened last year to educate members about the importance of TRIA and the need to renew it as quickly as possible. He says all allied industries, insurers and risk managers, did so because they were aware there had been huge turnover in Congress over the last several years, and that many members were not around when the debate that resulted in enactment of the current bill in 2007 took place.

“We have been working on educating members about this issue this since the current Congress started last January,” DePoy says. But, obviously, budget discussions, healthcare and other issues took priority. “And then flood obviously intervened on the discussion,” DePoy says. “But, with that behind us, we are optimistic that Congress is now ready to focus on it.”

He says that Senate Banking Committee members have indicated it is crafting legislation that could result in a discussion draft being released within the next several weeks, and officials of the House Financial Services Committee have indicated they will take up the issue in late April.

“The strongest argument we are making is that the TRIA program has worked,” DePoy says.

DePoy adds CIAT officials and members are telling Congress TRIA “plays an important role in homeland security.” He says al Qaeda “has committed itself to disrupting commerce through terrorist attacks,” but TRIA defends against that “by putting in place an orderly mechanism for processing claims in the event of a terrorist attack, thereby limiting the fallout from that attack.”

He also notes that there are a number of retention programs included in the existing TRIA program that limit exposure of taxpayer to terrorism losses, therefore insulating taxpayers from losses related to this program. Additionally, he says because take-up rates for terrorism risk insurance has risen, the cost of this insurance has come down.

At the same time, CIAT members are “much more concerned about availability than the cost of terrorism risk insurance. We understand this is costly, but we look at this from the prism of availability,” he says.

NAIC wants FSB representation

The National Association of Insurance Commissioners wants to have a voice within the Financial Stability Board, an international group that seeks to promote creation of uniform regulatory-oversight policies for financial firms.

Currently, only the Federal Reserve Board, the Securities and Exchange Commission and the Treasury Department represent the U.S. on the FSB.

The NAIC's views were voiced in a letter to those agencies signed by Adam Hamm, NAIC president and North Dakota insurance commissioner.

Hamm says because the FSB is increasingly driving international standard-setting beyond its primary focus on financial stability, its work has the potential to impact the U.S. insurance sector.

Hamm notes the NAIC is seeking “to strengthen U.S. participation” in the FSB by “directly providing our insurance expertise and regulatory perspective to these important discussions that will have import for the companies we regulate.”

Hamm says to illustrate the far-reaching implications of FSB discussions as they relate to regulated companies, the U.S. insurance market represents one third of the total insurance market worldwide.

“If FSB proposals are to be relevant and considered for integration into the U.S. regulatory regime where appropriate, then U.S. participation in FSB discussions should reflect our unique regulatory structure and not be hampered by arbitrary limitations and seat assignments that place the U.S. at a disadvantage relative to more consolidated regulatory regimes,” Hamm says.

The letter also points to examples of FSB working groups that directly impact insurance regulation, such as the Standing Committee on Supervisory and Regulatory Cooperation, which deals with systemic risk and group supervision issues, and the Insurance Cross Border Crisis Management Group under the Resolution Steering Group.

The FSB was established to coordinate the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies.

The FSB is now headed by Mark Carney, governor of the Bank of England, and is headquartered in Basle, Switzerland, at the offices of the Bank for International Settlements.

Besides central bankers and government agencies, its members include money center financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.