WASHINGTON, D.C., May 7, 2014 - J. Stephen ("Stef") Zielezienski, senior vice president and general counsel for the American Insurance Association (AIA), issued a statement in response to a new RAND study that analyzes the potential negative effects on the workers` compensation market if the Terrorism Risk Insurance Act (TRIA) is allowed to expire. The report, "The Impact on Workers` Compensation Insurance Markets of Allowing the Terrorism Risk Insurance Act to Expire" released today by the RAND Corporation, confirms that allowing TRIA to expire could have negative economic consequences for business, states and insurers. Support for the study was provided by the property-casualty insurance industry and major business groups, including AIA.
The Terrorism Risk Insurance Act (TRIA) was first authorized in 2002 following the terrorist attacks of September 11, 2001. It was subsequently reauthorized in 2005 and 2007 with broad bipartisan support, and is scheduled to sunset on December 31, 2014.
Mr. Zielezienski`s statement follows:
"The latest RAND report highlights the importance of TRIA`s reauthorization to workers` compensation coverage. TRIA plays a vital role in helping to maintain well-functioning workers` compensation markets throughout the nation.
"Unlike other insurance lines covered by TRIA, businesses and insurers have less flexibility when it comes to workers` compensation coverage for terrorism risk, which nearly all U.S. employers are mandated to provide. Absent TRIA`s protections, insurers would be forced to manage their terrorism risk exposure for a line of insurance that provides no flexibility for the parties to limit or exclude coverage. In turn, those individual decisions to provide or limit capacity could force employers to seek coverage in state residual markets-thereby leaving states and their taxpayers exposed in the event of a catastrophic terror attack.
"TRIA remains vital to our nation`s economic security as terrorism remains a real threat. Given the fundamental role that TRIA plays in providing market stability and an orderly post-event recovery, coupled with the program`s taxpayer protections, it deserves prompt reauthorization by Congress."
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Source: American Insurance Association via GlobeNewswire
- American Insurance Association
- Terrorism Risk Insurance Act