The Self-Insurance Institute of America (SIIA) has ramped up its lobbying efforts in favour of reauthorisation of the Terrorism Risk Insurance Act (TRIA) as a congressional vote looms.
The SIIA argues that if the bill is not extended, captives writing terrorism-related risks will become “no longer viable alternative risk transfer vehicles”.
According to the SIIA: “Over the past few weeks, SIIA lobbyists have met with about a dozen key members of congress to discuss the legislation and educate them about TRIA captives. While many lawmakers are unwilling to consider the impact of TRIA’s expiration, a significant number of members from both parties have told SIIA that they are willing to extend the program to ensure terrorism coverage does not become too costly or unavailable. Insiders confirmed that industry stakeholders will need to pressure committee and party leadership to understand the costs of the program expiring.”
Mike Ferguson, chief operating officer of the SIIA, told Captive International: “If TRIA is allowed to expire, the standalone terrorism coverage market will see costs skyrocket, and/or availability dry up. TRIA mandates carriers to offer terrorism coverage with their property policies but expiration and the absence of reliable actuarial models to properly price premiums would cause carriers to withdraw from the market, especially in high-risk areas. Captive-written policies likely have provisions enabling them to cancel or modify terrorism coverage in the event TRIA is allowed to expire."
Phillip England, a shareholder in law firm Anderson Kill & Olick, said: “Congress considers captives a back-burner issue— there is no real expertise and congress tends to leave captive issues to the IRS. Captive owners need to focus on congresspeople on Homeland Security committees. Routine communications to congress generally will not accomplish anything.”
Ferguson concluded: “Captive owners can contact their elected officials from a constituent’s point-of-view and provide background on captives and their role in insurance. A lobbying coalition, especially grassroots advocacy, would go a long way towards reaching a favourable regulatory climate for the insurance industry.”
SIIA, TRIA, terrorism, lobbying