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TRIA extension passes Senate

Industry groups have welcomed the US Senate’s support for a seven-year renewal of the Terrorism Risk Insurance Act (TRIA).

However, the Risk and Insurance Management Society (RIMS) says a long-term solution is now essential.

“With the House [of Representatives] and the Senate both in agreement that… a reauthorised TRIA bill is a necessity, it’s time for the two groups to come together and devise a final version,” RIMS President Carolyn Snow said.

“Any global business that has facilities, employees or components of their supply chain here in the US will be affected should TRIA expire.”

Current TRIA legislation is due to expire at the end of this year.

The Senate’s plan for a seven-year extension was voted through last week. It must now be approved by the House of Representatives, which has struggled to agree on reauthorisation, with some conservatives looking to wind it down.

Last month the House’s committee on financial services approved a competing bill to reauthorise TRIA for five years.

The Act was introduced after the September 11 2001 attacks, when insurers began to withdraw terrorism cover. It provides a reinsurance backstop for major events.

Ms Snow says a private-public partnership is the best approach to covering nuclear, biological, chemical and radiological attacks.

She wants all commercial property, workers’ compensation, auto and general liability lines included in a new plan, and says commercial insurers should be required to participate and cover acts of terrorism.

Broking group Aon has welcomed the Senate’s move and called on Congress to quickly extend the Act.

“We believe TRIA has been an unqualified success in stabilising the insurance markets by allowing insurers to provide much-needed terrorism coverage to consumers at prices they are able to afford.”