RIMS supports TRIA extension

The Risk and Insurance Management Society (RIMS) has commended the June 18 introduction of the Terrorism Risk Insurance Revision and Extension Act (TRIREA) of 2007.RIMS strongly supports the reauthorization of TRIA and believes the introduction of this important measure represents the commitment of Rep. Mike Capuano (D-Mass.) and Rep. Barney Frank (D-Mass.) to protect the nations economic security, says Terry Fleming, a member of the RIMS board of directors and director of the division of risk management for Montgomery County, Maryland.Acts of terrorism are difficult to predict, making them difficult to price, Fleming added. Without some type of certainty to make reasonable estimates of terrorism losses, the insurance market will not provide coverage. This legislation goes a long way in ensuring that terrorism insurance remains available and affordable for U.S. companies, and to keep the market and national economy stable.Congress passed the Terrorism Risk Insurance Act (TRIA) in 2002 to create a federal backstop to protect against terrorism-related losses. In 2005, the measure was extended for two years and is set to expire at the end of 2007. The newly introduced legislation offers significant improvements to the program. RIMS is pleased to see inclusion of language extending the existing program for an additional 10 years, eliminating the distinction between foreign and domestic terrorism, and addressing the issue of coverage for nuclear, biological, chemical and radiological (NBCR) events, RIMS said in a press release. Some other important provisions include setting the program trigger at [US]$50 million; adding group life to the lines of insurance for which coverage must be made available; offering decreased deductibles and triggers for areas previously impacted by a significant terrorist attack; and establishing a Commission on Terrorism Risk Insurance to further study and evaluate the program moving forward.