Lloyd's welcomes the step towardsTRIA renewal, but seeks a permanent solution

Lloyd’s has welcomed the passing in the House of Representatives of legislation to renew the US Terrorism Risk Insurance Act. This came less than a month after the Senate passed its own version of the extension. The House and Senate will now try to create a single, combined version of their bills and vote on it again before TRIA expires on 31 December.

Wendy Baker, president of Lloyd’s America, says that the expected renewal of TRIA is welcome but adds that the Lloyd’s market recognizes the need for a permanent solution:

“While TRIA may not be the panacea, there is no doubt that there needs to be government involvement in providing a backstop or some sort of assistance for this risk,” Baker says.

“There also seems little doubt that there will be further terrorist activity in the US and around the world. As always the insurance industry will be there to pay the loss, but we also need to be there to pay the day-to-day losses for all our policyholders. That is why TRIA, Pool Re in the UK and other solutions are important to us all.”

TRIA requires insurers to provide coverage for commercial risks and, in return, guarantees that the US government will pay most of the losses after an initial deductible, up to $100 billion a year.

According to Lloyd’s, many terrorism experts suggest a long-term US solution could be modeled on Pool Re, the UK insurance industry terrorism fund that includes government as the ultimate reinsurer.

Source: LLoyd's

•Date: 9th Dec 2005 • Region: US • Type: Article •Topic: Terrorism
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