Governor Pataki Leads Effort for Renewal of the Terrorism Risk Insurance Act
GOVERNOR PATAKI LEADS EFFORT FOR RENEWAL OF THE TERRORISM RISK INSURANCE ACT
Pataki and 27 Other Governors Call for Temporary Extension that Ultimately Leads to Viable Long-term Solution
Governor George E. Pataki is leading the effort of 28 Governors around the nation, writing to Senate Majority Leader Frist, House Speaker Hastert, Senate Minority Leader Reid and House Minority Leader Pelosi calling for the expeditious renewal of the Terrorism Risk Insurance Act (TRIA) program to ensure New York's and the nation's businesses continue to be protected against the threat of terrorist attack. TRIA is set to expire on December 31, 2005.
"Terrorism coverage is an integral part of any businesses' risk management efforts. With TRIA due to expire in less than two months, I am leading the call for immediate Congressional action to ensure the availability of sufficient terrorism coverage and avert property/casualty insurance market disruptions," said Governor Pataki. "The expiration of TRIA would severely impact New York's construction and real estate industries and would have detrimental effects on the rebuilding of Lower Manhattan. Ensuring our insurance marketplace remains sound is critical to continuing to foster a full economic recovery from the September 11th attacks and sustaining overall growth of the national economy." "In absence of TRIA, consumers or their primary insurers will be ultimately left to assume and address terrorism exposure. New York and the nation's businesses will be forced to make economic choices when faced with high premiums for less coverage or more dramatically with the notion of going without coverage. TRIA has accomplished its primary mission, creating a financial mechanism whereby private-sector insurers--after the satisfaction of an insurance company deductible--and the Federal Government shares equitably the cost of paying losses in the wake of a major terrorist attack. While we continue to seek a viable long-term solution, we must ensure the coverages are available in the short-term," the Governor added. The Terrorism Risk Insurance Act of 2002 was signed into law on November 26, 2002. The law established the federal Terrorism Insurance Program that provides for a system of shared public and private compensation for insured losses resulting from acts of terrorism, in order to protect consumers by addressing market disruptions and ensure the continued widespread availability and affordability of property and casualty insurance for terrorism risk.
A copy of the text of the letter from all 28 Governors is attached.
November 8, 2005
The Honorable Bill Frist
Majority Leader
United States Senate
Washington, DC 20510
The Honorable J. Dennis Hastert
Speaker
House of Representatives
Washington, DC 20515
The Honorable Harry Reid
Minority Leader
United States Senate
Washington, DC 20510
The Honorable Nancy Pelosi
Minority Leader
House of Representatives
Washington, DC 20515
Dear Senator Frist, Senator Reid, Speaker Hastert and Representative Pelosi,
We are writing to express our strong belief that our nation's economy depends on the availability and affordability of terrorism insurance. In the wake of the attacks of September 11th, the Terrorism Risk Insurance Act (TRIA) program proved critical to our nation's economic recovery. Now less than two months before its scheduled expiration, we urge you to act quickly and ensure that our businesses can continue to be protected against the threat of terrorist attacks.
If a federal terrorism insurance backstop is not continued in some form, businesses will face market conditions similar to those experienced after September 11th. Policyholders will likely pay exorbitantly high premiums for terrorist insurance, or simply be unable to secure it. The Treasury Department's recent report to Congress of the state of TRIA noted that the immediate effect of ending TRIA "is likely to be less terrorism insurance written by insurers, higher prices and lower policyholder take-up." In the absence of any financial protection, a future terrorist attack will have a significant impact on our nation's ability to recover as businesses find themselves without the necessary resources to rebuild their operations. In addition, without a backstop, the United States will find itself at a competitive disadvantage against countries with a terrorism insurance program, such as the United Kingdom or Germany, when attempting to attract international private investment.
As you move forward, we urge you to consider a temporary extension that ultimately leads to a viable long-term solution providing adequate protection and reduced taxpayer exposure. The primary beneficiaries of TRIA - policyholders - deserve the certainty a long-term solution would provide.
We look forward to working with you to ensure that terrorism insurance remains available and affordable.
Sincerely,
Governor George E Pataki
New York
Governor Arnold Schwarzenegger
California
Governor Kenny Guinn
Nevada
Governor Bob Taft
Ohio
Governor Jim Doyle
Wisconsin
Governor Robert L. Ehrlich, Jr.
Maryland
Governor Jeb Bush
Florida
Governor Thomas J. Vilsack
Iowa
Governor Jennifer M. Granholm
Michigan
Governor Christine O. Gregoire
Washington
Governor Theodore R. Kulongoski
Oregon
Governor Mitt Romney
Massachusetts
Governor Kathleen Sebelius
Kansas
Governor Jim Pawlenty
Minnesota
Governor Jodi Rell
Connecticut
Governor Brad Henry
Oklahoma
Governor Mike Huckabee
Arkansas
Governor Ruth Ann Minner
Delaware
Governor M. Michael Rounds
South Dakota
Governor Haley Barbour
Mississippi
Governor Janet Napolitano
Arizona
Governor Dave Freudenthal
Wyoming
Governor Edward G. Rendell
Pennsylvania
Governor Dave Heineman
Nebraska
Governor Jim Douglas
Vermont
Governor Jon Huntsman Jr.
Utah
Governor Dirk Kempthorne
Idaho
Governor John Hoeven
North Dakota
http://www.ny.gov/governor/press/05/1114051.htm