Washington – The Office of Management and Budget has released a “statement of administration policy” threatening a presidential veto of legislation aimed at extending the Terrorism Risk Insurance Act (TRIA).
TRIA, which was passed in the wake of 9/11, is set to expire this year. H.R. 2761 would extend the coverage for 15 years.
“The Administration strongly opposes efforts to expand the Federal government’s role in terrorism reinsurance,” the statement reads. “The most efficient, lowest cost and most innovative methods of providing terrorism risk insurance will come from the private sector.”
The statement also sets forth three conditions it says are necessary for the administration to accept an extension of TRIA: the Program should be temporary and short-term; there should be no expansion of the Program; and private sector retentions should be increased.
Many insurance industry associations are urging support for the extension.
"TRIA is absolutely vital to our economy, and it needs to be renewed before its expiration date,” says Ben McKay, senior vice president, federal government relations for the Property Casualty Insurers Association of America. “After 9/11, there was a slowdown in commercial building because terrorism is an uninsurable risk. TRIA helped make terrorism insurance available and affordable. The program has worked, and it continues to work. It would hurt our economy if we allow this much-needed program to lapse."
Sources: OMB, PCI
