Capuano Introduces Bill to Extend Terrorism Insurance

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PRESS RELEASE

Capuano Introduces Bill to Extend Terrorism Insurance

July 8, 2004

On Wednesday Congressman Mike Capuano (D-MA) introduced the "Terrorism Risk Insurance Program Extension Act of 2004" to reauthorize and extend federal terrorism insurance provided by the Terrorism Risk Insurance Act of 2002 (TRIA).

"TRIA has helped make terrorism insurance available and affordable to businesses. We need to act now to extend this successful legislation so that American workers and our cities and towns continue to be protected against possible terrorist attacks," stated Congressman Capuano.

The legislation (H.R. 4772), which is cosponsored by 26 Democratic members, would extend TRIA by two years, through 2007. Additionally, the legislation:

Makes it easier for businesses to get affordable terrorism insurance by including provisions to ensure that insurance policies enacted during the last year of the program do not lose their terrorism coverage before the policy expires;
Provides mandatory availability for terrorism coverage for the final two years of the program;
Makes terrorism reinsurance coverage available to group life insurance policies.

A stable, secure insurance market is vital to the health of our national economy. Nearly three years ago, the stability of the insurance industry, and all of our nation's policyholders, was put in jeopardy when insurers and reinsurers lost more than $40 billion as a result of the 9/11 attacks. In response, reinsurance companies limited the availability of terrorism insurance, and insurers were unable to make it available, leaving many of our nation's businesses vulnerable to insupportable risk.

Two years ago, Congress overwhelmingly passed TRIA to provide a limited federal backstop in the event of another catastrophic terrorist event. In doing so, lawmakers sought to ensure the availability of full coverage of the risk of terrorism for our nation's policyholders and to enable the insurance industry to recover from the losses they sustained in 2001. This legislation simply extends that federal backstop for a limited time. It has been referred to the House Financial Services Committee.

Contact: Alison M. Mills (617) 621-6208