COLUMBUS, Ohio -- Congress should reauthorize the federal Terrorism Risk Insurance Program that provides terrorism reinsurance so that insurers can maintain stability in the insurance and reinsurance markets and continue to deliver substantive and direct benefits to businesses, workers and consumers, state Reps. Michael Stinziano and Bob Hackett, R-London, say.
“Reauthorization of TRIA is needed to provide businesses with market stability and help prevent economic losses if and when terrorist attacks occur ,” Stinziano, a Columbus Democrat, said Tuesday, the day he offered sponsor testimony on House Concurrent Resolution 17 calling on Congress to approve reauthorization.
“Terrorism is a real threat, unfortunately, and we need to show our support for insurers and reinsurers to be able to help people,” said Stinziano, a member of the Ohio House Insurance Committee, which is chaired by Rep Hackett.
Congress originally passed the Terrorism Risk Insurance Act (TRIA) in 2002 in which the federal government agreed to provide terrorism reinsurance to insurers and reauthorized the arrangement in the Terrorism Risk Insurance Extension Act of 2005 and the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA).
Under TRIPRA, the federal government provides such reinsurance when industry-wide losses because of terrorism attacks top $100 million. After an insurer has reached that threshold, the insurer pays 15 percent of the residual losses and the federal government pays the remaining 85 percent.
Without the existing federally provided reinsurance program, insurers would no longer provide coverage for loses that are caused by acts of terrorism, thus potentially causing a dramatic blow to business and our economy according to Stinziano.
“Following the terrorist attacks of 2001, the lack of terrorism risk insurance before Congress created TRIA contributed to a paralysis in the economy, especially in construction, tourism, business travel, and real estate finance; resulting in many businesses, both large and small, being no longer able to find nor afford the insurance required by lenders and others for a variety of business transactions,” Stinziano said.
Stinziano and Hackett’s resolution is pending in the House Insurance Committee.