BestWeek: TRIA Compromise Likely Before End-of-Year Expiration

Business Wire, Nov 21, 2007

OLDWICK, N.J. -- Despite significant differences in House and Senate versions of legislation to renew the Terrorism Risk Insurance Program, industry observers widely expect a workable compromise before the $100 million backstop expires on Dec. 31, according to a story in BestWeek U.S./Canada.

The Senate cleared a seven-year extension by unanimous consent on Nov. 16, just ahead of the Thanksgiving recess. The House's 15-year version passed in September. The federal backstop, established in 2002 by the Terrorism Risk Insurance Act, is a top priority for the property/casualty industry.

"This is a must-do piece of legislation. There's already uncertainty in the marketplace," said Marliss Browder, senior federal affairs director for the National Association of Mutual Insurance Companies.

The White House has threatened a veto of the House version, objecting to the length and various expansions of the backstop, including a lowering of the trigger level to $50 million from the current--and Senate-passed--$100 million. House Financial Services Committee Chairman Barney Frank, D-Mass., has stood behind his chamber's version but has made comments aimed at compromise since the Senate passage.

Ben McKay, senior vice president of federal government relations for the Property Casualty Insurers Association of America, said the Senate bill is almost a "pre-conferenced" version, as it includes major priorities of Frank, his Senate colleagues and the industry.

"The senate bill is a subset of everything Frank wanted," he said. "By getting so much, Frank gave [Senate Banking, Housing and Urban Affairs Committee Chairman Chris] Dodd room to maneuver."

Also, in BestWeek Europe: A pending U.K. law will throw greater responsibilities on employers in the event of a work-related death, and insurers are pondering what its impact will be on liability exposure.

Also, in BestWeek U.S./Canada: While commercial carriers battled through another quarter of increasingly intense pressure on rates, the subprime mortgage crisis and the related stagnation in housing loomed over earnings.

And in both editions of BestWeek: The Best's Global Insurance Composite Index finished the week of Nov. 20 up 2.66% from a year ago. The composite index reflects the performance of 175 insurance stocks. The week's top performers were Beazley Group, Fairfax Financial Holdings, Aflac, National Security Group and National Interstate Corp.

The bottom five performers were Scottish Re, Cattolica Assicurazioni, XL Capital, Catlin Group and Swiss Reinsurance Co.

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Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.