TRIA extension bill introduced

Capital Markets Subcommittee Chairman Richard H. Baker tecently introduced legislation in the U.S. House of Representatives that would extend the Terrorism Risk Insurance Act for at least two years. The bill will increase the deductibles on all lines of insurance covered by the federal financial backstop created by TRIA and raise the size of insured losses that an insurer would have to sustain before the backstop could be enacted. “The legislation I have authored maintains an affordable terrorism insurance marketplace for consumers, while significantly increasing taxpayer protections and efficiencies,” Baker says. “Our committee has held several hearings and has solicited the views of the Treasury secretary, insurance providers, policyholders and consumer groups, and I believe my bill provides a comprehensive solution to addressing both their concerns and suggestions.” In opposition the Treasury Department says they are concerned with provisions in the House bill that expand the program and increase risk for taxpayers because as it has been introduced, the bill will increase lines of coverage and complexity. The Treasury says they are adamant in the belief that any extension must result in private-market participants taking on a larger role in providing terrorism coverage and the risk to taxpayers being decreased.