- Chinese Death Star: The moon cited as the perfect launch pad for ballistic missiles
- Help wanted: Homeland Security plagued by vacancies at the top
- We are not amused: Queen’s protection officers warned to keep ‘sticky fingers’ off the royal cashews
- Unleash the crossbows: Gov. Scott Walker creates new hunting season
- Bubonic plague kills 20 in Madagascar
- G-20 diplomats fell for hacker attack promising nude photos of former French first lady Carla Bruni
- Minnesota guardsman charged with stealing private soldier data for fake IDs
- Florida appeals court rules universities can’t regulate guns
- Vladimir Putin defends Russian conservative values
- Tea Party Patriots call key GOP firing a declaration of war
Insurers want to keep subsidy for losses from terrorist acts
Question of the Day
More than a decade after Congress got into the insurance business, offering policies for businesses wary of terrorism-related losses in the wake of the Sept. 11 attacks, lawmakers are weighing the program’s future.
“It is critical to our families, workers, businesses and economy that Congress develops a long-term solution to terrorism risk insurance,” said Rep. Judy Biggert, Illinois Republican and chairwoman of the Financial Services subcommittee on insurance, housing and community opportunity, which held a hearing Tuesday on the program.
The Terrorism Risk Insurance Act, established in November 2002, serves as a federal backstop for private insurers who started dropping terrorism coverage after 9/11 because of the uncertainty of future attacks. The law requires private insurers to offer government-backed terrorism policies to businesses. With the government backing, insurers are on the hook for only a small portion of potential losses.
The program is set to expire in December 2014, and insurers and company policyholders are calling on Congress to renew the subsidy or watch insurers drop the coverages or raise premiums.
Opponents of the program say TRIA has served its purpose and it’s time to move on.
“We have now reached a point where the private sector is increasingly capable of providing that coverage at appropriate prices without government support,” said David John, senior research fellow in retirement security and financial institutions at the Heritage Foundation. “The insurance crisis has passed, and the insurance industry now has enough information about terrorist attacks to again provide this coverage.”
Continuing to rely on government support only leads to underpriced coverage, he said.
“The terrorism peril is simply too intrinsically linked to government policy and intelligence to be solely handled by the private sector,” said Mr. Lundberg, testifying on behalf of the Coalition to Insure Against Terrorism, of which the Chamber is a member. “As we saw in the months following the 9/11 terrorist attacks, the lack of terrorism insurance contributed to a paralysis in the economy.”
The terrorist attacks on the World Trade Center on Sept. 11, 2001, led to $35 billion in claims — an unexpected strike that nearly led to the collapse of the terrorism insurance industry and an economic slowdown in industries such as construction, tourism, business travel and real estate finance.
Studies show that more than $415 billion in real estate transactions were stalled or canceled in the 14 months after the attacks because of the lack of terrorism insurance, which led to the direct loss of 300,000 jobs from deferred construction projects.
The impact of limited terrorism insurance coverage would be even worse in today’s economy, Mr. Lundberg said. “There is every reason to expect that the jobs impact would be greater and more widespread today were the certainty of the terrorism insurance program to be pulled out from under our economy.”
TRIA provides a safety net for private insurance companies when the cost of terrorism exceeds an insurer’s coverage ability.
Proponents argue that terrorism insurance actually saves the government money, because without it taxpayers would end up paying more in ad hoc disaster assistance, if such an event were to occur.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at firstname.lastname@example.org.
- GM's Barra to be first woman to run top American carmaker
- Treasury sells last shares in 'Government Motors'
- U.S. businesses reach out quickly to partners in Iran
- General Motors ending Chevrolet sales in Europe to focus on Opel and Vauxhall
- 'Momentous day' for in-debt Detroit
Latest Blog Entries
By Matt Kibbe
The short-term deal will assure long-term overspending
- Obama's Afghanistan experts stumped on U.S. death toll, war costs during hearing
- NAPOLITANO: A conspiracy so vast
- House pushes through two-year Ryan-Murray budget deal
- Comma on!: Twitter erupts over Obama-Castro 'marriage'
- N. Korean news agency: Kim Jong Un's uncle executed
- Biden guarantees victory on immigration reform
- Jane Fonda Foundation fails to make single contribution in 5 years: report
- All-out war breaks out in GOP over budget pact
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
- White House improvises again on patchy Obamacare rollout
Independent voices from the The Washington Times Communities
Born in 1930 in rural Missouri, Charles Vandegriffe, Sr., brings his time and place to the Communities.
Columns from Voices around the World talking about the events, people, politics and social issues that concern us wherever, and whoever, we are.
Chef Mary Moran discusses the food we eat, where it comes from and what it does for us.
An informed and often humorous take on the world of advertising, public relations and social media. 100% Pure. Not from concentrate.
Extraordinary day at Redskins Park
White House pets gone wild!
Let it snow