RIMS calls post-TRIA terrorism cover a “national security” issue

Risk managers in the United States are worried about their potential inability to purchase terrorism insurance in the event that the Terrorism Risk Insurance Act (TRIA) is allowed to sunset on Dec. 31, 2007.
“Without coverage, many companies will be vulnerable to bankruptcy and extreme financial losses, which ultimately could adversely impact the nation’s economy,” The Risk and Insurance Management Society, Inc. (RIMS) testified at a U.S. government hearing. “RIMS considers the availability of adequate insurance for acts of terrorism not just an insurance problem, but a national security and economic issue.”
U.S. President George W. Bush signed TRIA into law in November 2002. The law creates a three-year federal program that backs up insurance companies and guarantees that certain terrorist-related claims will be paid.
RIMS is concerned nothing will replace the void created when the act expires in 2007. RIMS made its concerns known in July to the Committee on Financial Services, Subcommittee on Oversights and Investigation, and the Homeland Security Subcommittee on Intelligence, Information Sharing, and Terrorism Risk Assessment.
Terry Fleming, a RIMS board director and director of RIMS’ external affairs, delivered the testimony on behalf of RIMS and its membership.
“After September 11, 2001, and before the passage of TRIA, many RIMS members found it difficult to purchase property insurance, including coverage for terrorism on buildings and construction projects,” RIMS noted in a press release. “RIMS believes it is critical that a program be developed to provide continued coverage for acts of terrorism, including nuclear, biological, chemical, and radiological acts.”