May 5, 2004—In a joint hearing of the House Financial Services Committees Capital Markets, Insurance and Government-Sponsored Enterprises Subcommittee and the Oversight and Investigations Subcommittee held on April 28, legislators of both parties overwhelmingly showed support for extending the “make available” provision of the Terrorism Risk Insurance Act of 2002 (TRIA).
TRIA is set to expire at the end of 2005 unless Congress acts to extend it. In addition, one of the key provisions of the Act, which mandates that insurance companies “make available” terrorism insurance on the same terms and conditions as property and casualty insurance, expires at the end of 2004. Whether or not to extend this provision of the Act is the decision of the Treasury Secretary, who must act by September 1, 2004.
At last weeks hearing, subcommittee members made their views known to the witness representing the Department of Treasury, assistant secretary for financial institutions Wayne Abernathy. Mr. Abernathy was encouraged to extend the “make available” portion of the Act, and to make that decision sooner rather than later to ensure that policyholders and insurers can make informed decisions without any unnecessary uncertainty in the insurance market. Under TRIA, the Treasury Dept. is also required to develop a report on the effectiveness of the Act. That report is not due to Congress until June of 2005. Many of the legislators at the hearing acknowledged that if they wait for the report prior to making a decision on whether to extend TRIA, Congress would then only have about 90 days to craft and pass legislation prior to adjournment in November 2005. A one- or two-year extension of the existing program would give Congress until the end of 2006 or 2007 to create a replacement program, if needed, with the goal of phasing out the federal governments role in the reinsurance marketplace. Legislation to extend TRIA is expected within the next several weeks. BOMA International and its coalition partners in the Coalition to Insure Against Terrorism (CIAT) support this approach.
—From BOMA.orgs Currents
