Washington, DC – The Property Casualty Insurers Association of America’s (PCI) Board Member and President and CEO of the PMA Insurance Group (PMA) Vincent Donnelly recently testified on the importance on reauthorizing the Terrorism Risk Insurance Act (TRIA) before the Senate Committee on Banking, Housing, and Urban Affairs hearing on “Reauthorizing TRIA: The State of the Terrorism Risk Insurance Market, Part II.”
“Reauthorization of TRIA is critical to our customers and our business. The private insurance markets are not willing to accept every risk – particularly unpredictable and potentially catastrophic risks like terrorism – and a failure by Congress to reauthorize TRIA or a significant increase in TRIA’s thresholds will force insurers and a significant amount of private capital out of high risk markets,” said Donnelly. “Having a terrorism risk insurance plan in place before the next attack protects our country’s economic resiliency and security at nearly no cost to the taxpayers. The Terrorism Risk Insurance Act works and PMA and PCI strongly urge Congress to reaffirm its support for this critical national resiliency plan.”
PMA specializes in the writing of workers compensation insurance. Workers compensation insurance provides wage replacement and medical benefits to employees injured in the course of employment. If TRIA were not reauthorized, some insurers may exit the market leading to less competitive prices. And the immense scale of potential unlimited terrorism losses for workers compensation insurers could impair the ability to pay the claims of injured workers.
PCI and our members “support the current terrorism insurance program so strongly – it has done a superb job of bringing in private capital that would otherwise not be made available, with government involvement only at the most extreme levels,” continued Donnelly.
“As Congress revisits TRIA, it is appropriate to inquire whether the program is working as intended or whether additional reforms should be considered,” said Donnelly. However, “if TRIA is reauthorized with higher thresholds, the retained risks for insurers would exceed the probable maximum losses they can retain and many could be driven out of the market.”
“PCI hopes that the Committee will recognize the enormous success of TRIA in providing terrorism risk coverage in a fiscally responsible manner that protects our country’s economy while greatly reducing the need for government assistance after a catastrophic terrorist attack,” concluded Donnelly.
Donnelly’s complete testimony is available here (PDF).