The Terrorism Risk Insurance Act (TRIA) is back in business. President Barack Obama signed into law H.R. 26 on Jan. 12, following its passage this week by the U.S. Senate and last week, by the U.S. House of Representatives. The law extends TRIA for six years, after it had expired Dec. 31, 2014, when U.S. senators failed to act before adjourning for the year. The law also establishes the National Association of Registered Agents and Brokers (NARAB II) to streamline agent licensing.
First signed into law by President George W. Bush in 2002, TRIA creates a federal program for insurance claims related to acts of terrorism, and provides a “transparent system of shared public and private compensation for insured losses resulting from acts of terrorism,” according to the U.S. Department of Treasury.
The news was welcomed by the insurance industry. The Property Casualty Insurers Association of America (PCI) said the bill signing is a momentous occasion for consumers, taxpayers, and its members. “This long-term legislation will minimize market disruptions, maintain the availability and affordability of terrorism insurance for consumers, and protect taxpayers. The overwhelming bipartisan votes in the House and Senate are a testament to the need for this critical program to preserve economic certainty today and provide for economic resiliency in the face of a catastrophic terrorist event. PCI applauds the President and Congress for making TRIA a top priority,” said Nat Wienecke, senior VP, federal government relations for PCI.
RIMS, a nonprofit risk management society focused on advancing risk management, noted that its several years of delivering testimony, lobbying and developing initiatives has been rewarded and commended President Obama and Congress for authorizing the extension. The society’s immediate past president, Carolyn Snow, said in a statement that the last three weeks—while TRIA’s fate was uncertain—was particularly unsettling. “Brokers, underwriters and commercial insurance consumers were faced with the stark reality of the challenge to protect their businesses and clients from potentially catastrophic and unpredictable losses incurred by an act of terror. RIMS commends our leaders in Washington, D.C., for addressing this uncertainty immediately upon their 2015 return and authorizing a fair extension,” Snow said.
The establishment of a permanent NARAB will streamline nonresident agent licensing to benefit small businesses and many insurance consumers, according to the Independent Insurance Agents & Brokers of America (IIABA). NARAB II will build upon regulatory experience at the state level, promote greater consistency in non-resident agent and agency licensing, ease the burden that many agents face in doing business across state lines, and increase consumer choice, IAABA said.
While setting up a permanent NARAB may take some time, the IIABA “looks forward to working on implementation of this important new law that will provide relief for agents and brokers as well as increased choice for consumers,” said IIABA president and CEO Bob Rusbuldt.
