Industry Professionals Address Congress as the Expiration of TRIEA Draws Near

March 15, 2007
Advocates push for a continuation of the federal government backstop

Members of Congress (specifically the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services’ Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises) have been busy in the last few weeks hearing arguments for and against a continuation of the federal terrorism risk insurance program.

On Feb. 28, the insurance industry went before the Senate Committee, praised the program, and proposed that the federal government continue to play a role in ensuring that businesses have access to affordable coverage past the Dec. 31, 2007, expiration of TRIEA. The Independent Insurance Agents and Brokers of America (IIABA), also known as the big "I," was represented by Tom Minkler, president, Clark-Mortenson Agency Inc. According to Minkler, the backstop is still needed: “... even though the insurance marketplace responded effectively to the 9/11 losses, it was quickly apparent, and remains so today, that insurers could not handle the risk of further large-scale terrorist events without a federal backstop.” To read the complete statement from IIABA, visit (

The current backstop legislation, the Terrorism Risk Insurance Extension Act (TRIEA) of 2005 has been an unqualified success and according to Don Bailey, CEO at Willis North America and a representative of The Council of Insurance Agents & Brokers (as quoted in Insurance Journal), expiration would be “economically devastating”.

The Senate Committee also heard the voices of other insurance and real estate professionals that day. A long-time advocate against the federal terrorism risk insurance program, Travis Plunkett, legislative director at the Consumer Federation of America (CFA), voiced concern about extending TRIA indefinitely, but instead recommended a 4- to 5-year extension to protect businesses against nuclear attack. A 2004 study by the CFA, “The Terrorism Risk Insurance Act: Should it Be Renewed?”, cited only nine cities as having moderate to high risks for terrorist attacks and concluded that there would be minimal increases in the cost of coverage once TRIA (the original Terrorism Risk Insurance Act of 2002) expired. To review the findings from CFA’s 2004 study, visit (

Panelists and participants agree. Changes to the program are necessary (especially when it comes to nuclear attacks), but continued involvement from the federal government is necessary. At the closing of the Feb. 28 hearing, Senate Committee Chairman Christopher Dodd (D-CT) stated, “I am pleased to see that there is a general consensus that the option of doing nothing is not an option.”

On March 5, the Coalition to Insure Against Terrorism (CIAT) was represented by Stephen L. Green, chairman, SL Green Realty Corp., at a hearing of the Senate Subcommittee and House Committee on Financial Services. “As we have seen before in 2005 when the Terrorism Risk Insurance Act (TRIA) was set to expire, problems associated with the availability of terrorism risk insurance will increasingly get worse as the year wears on,” said Green in his statement. Green urged Congress not to delay and warned that as expiration nears, policies will again begin to issue “pop-up” and “springing” exclusions that void terrorism coverage after the termination of TRIEA. CIAT proposes a long-term solution; to read the organization’s plan, visit (

Not only is the message clear, but with so many industry representatives communicating similar worries regarding TRIEA's expiration to Congress, it’s certainly unified. The consensus so far is that continued intervention by the federal government to ensure available and affordable terrorism risk insurance coverage is still very much needed.

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