Author Archives: Nathan Bacchus

About Nathan Bacchus

Nathan Bacchus is senior government affairs manager at theRisk and Insurance Management Society (RIMS).
Для тех, кто интересуется безопасным доступом к онлайн-играм, наш партнер предлагает зеркало Вавады, которое позволяет обходить любые блокировки и сохранять доступ ко всем функциям казино.

New Reports Support Call for TRIA Extension

Posted on by

Two recent reports from the Presidential Working Group (PWG) on Financial Markets and Marsh & McLennan Companies support the argument for a long term extension of the federal Terrorism Risk Insurance Program, otherwise known as TRIA. The much anticipated report from the PWG draws upon comments from many industry groups and interested parties, including RIMS, while the Marsh report is a follow-up to a similar report issued in May 2013.

The “2014 Marsh Terrorism Risk Insurance Report,” released Tuesday, states that “if Congress does not renew or extend the federal backstop, the market dynamics for terrorism insurance will be disrupted and will likely result in increased pricing and limited capacity.” Marsh’s support for a long-term extension of the program is in line with the majority of the insurance industry as TRIA nears its December 31, 2014 expiration. “The potential for adverse economic consequences due to limited or unavailable terrorism insurance should be an impetus for quick congressional action to reauthorize [TRIA].”

Similarly, the PWG study, required by TRIA legislation, made several findings relating to the need for extending the program:

  • Insurance for terrorism risk currently is available and affordable;
  • Prices for terrorism insurance have declined since TRIA was enacted;
  • Take-up rates have improved since TRIA’s passage;
  • The market is currently tightening in light of TRIA’s uncertain future;
  • The private market does not have the capacity to provide reinsurance for terrorism risk to the extent currently provided by TRIA; and,
  • Terrorism insurance would likely be less available should TRIA be allowed to expire

Bi-partisan legislation was recently introduced in the Senate that would extend TRIA for seven years; however, the industry continues to eagerly await legislation from the House Financial Services Committee leadership. While the Senate bill reforms the program, many expect House leadership to ask for more far reaching changes.

Senators Reach Deal on TRIA Extension

Posted on by

Key U.S. Senators have announced a bi-partisan agreement on a long term TRIA extension. Senators Charles Schumer (D-NY), Dean Heller (R-NV), Jack Reed (D-RI), Mark Kirk (R-IL), Chris Murphy (D-CT) and Mike Johanns (R-NE) are the cosponsors of the legislation that is expected to be introduced in the next day or two.

“In a post-9-11 New York, terrorism risk insurance has proven to be an absolutely essential partnership between the government and the private sector that has turned rebuilding downtown Manhattan from a question to a certainty,” said Senator Schumer. “But there is still more to be done and this crucial bipartisan plan will reauthorize and extend the Terrorism Risk Insurance Act before it expires at year’s end. Redevelopment and economic growth should be encouraged in New York and other high-risk areas across the country, even in the face of unfathomable terrorist events, and I will work with my colleagues to get TRIA passed this year to preserve this essential tool.”

“Chicagoans believe it is our birthright to stand in the shadows of the tallest buildings in the world,” Senator Kirk said. “With its private-public partnership, TRIA will better protect the economy from terrorist harm while protecting taxpayers from financial risk.”

The Senate legislation would extend the program for seven years while raising the recoupment amount from $27.5 billion to $37.5 billion and increasing the industry’s copay amount to 20% from 15%.

buy glucophage online https://silvermancare.com/wp-content/uploads/2023/10/jpg/glucophage.html no prescription pharmacy

These changes would be phased in over the next five years.

While reaching a deal in the Senate is a key step in getting TRIA passed, and welcome news to advocates of a long-term extension, including RIMS, there is still a long way to go before an extension is passed. The Senate version must still go through the full Senate process, while, on the House side, there continues to be significant resistance from House Financial Services leadership, including Representatives Jeb Hensarling (R-TX) and Randy Neugebauer (R-TX), who remain skeptical of the program. Any bill from the House Financial Services Committee is expected to include more far reaching adjustments to the program.

buy bimatoprost online https://silvermancare.com/wp-content/uploads/2023/10/jpg/bimatoprost.html no prescription pharmacy

TRIA Advocates Testify in Favor of Long-Term Extension

Posted on by

On Tuesday, February 25, the Senate Banking, Housing, and Urban Affairs Committee held a hearing on “Reauthorizing TRIA: The State of the Terrorism Risk Insurance Market.” Witnesses from several industry groups advocated for a long-term, if not permanent, extension of the program beyond its current deadline of December 31, 2014.

“The availability and affordability of adequate insurance coverage for acts of terrorism is not only an insurance issue, but an economic one,” said RIMS President Carolyn Snow. “By providing a backstop, and assuming some of the market terrorism risk as a reinsurer, the federal government has freed up capacity in the private market that would not otherwise exist.”

Douglas Elliot, president of commercial markets for The Hartford Financial Services Group, and speaking on behalf of the American Insurance Association, argued against any sweeping changes to the current TRIA program. “A number of proposals that have been discussed could-in the name of increasing private market capacity for terrorism risk-actually lead the industry to a tipping point beyond which individual insurers would need to make difficult decisions to safeguard a company’s financial condition instead of maintaining the current level of exposure to catastrophic terrorism risk.”

Many witnesses, including W. Edward Walter, president and CEO of Host Hotels & Resorts, on behalf of the Coalition to Insure Against Terrorism, addressed the effect that TRIA’s uncertainty will have on the lending industry. “The lack of clarity around this issue will likely slow the pace of new financing, especially in the case of properties that are perceived to be a higher risk of terrorist attacks such as high profile buildings and real estate generally located in key gateway urban markets.”

When asked for the ideal duration of a TRIA extension, all of the witnesses asked for a permanent solution with ten years being a minimum timeframe for an extension.

This is the second hearing that the Senate Banking Committee has held on the issue. Committee leadership seemed to understand the urgency and expressed a desire to move on the issue sooner rather than later; however, House leadership has expressed a desire to make changes to the legislation which could slow action on an extension as those changes are debated.

Industry Submits Comments on International Tax Reform

Posted on by

On November 19, 2013 the Senate Finance Committee released its proposals for reforming the United States international tax system with the goal of making U.S. businesses more competitive. One of the provisions included in the draft was the reinsurance tax, commonly referred to as the “Neal Bill.” This provision, introduced in the past few legislative sessions by Rep. Richard Neal (D-MA) and Sen. Robert Menendez (D-NJ), would disallow an income deduction for reinsurance premiums paid by an U.S. insurer to an affiliated reinsurer if the reinsurer is not subject to U.S. federal income tax on the reinsurance premiums. Over the past few weeks, several groups have taken the opportunity to comment on the committee’s draft, and specifically the inclusion of the Neal Bill language.

Upon release of the discussion draft, the Coalition for Competitive Insurance Rates (CCIR) expressed its opposition to the inclusion of the Neal Bill provisions. “The decision by Sen. Max Baucus (D-MT) to include this provision in the Finance Committee’s draft ignores warnings from elected officials, state insurance commissioners, trade experts and consumer advocates that this tax would drive up the cost of insurance to homeowners and small businesses.”

Many members of CCIR, including RIMS, also took the opportunity to express their opposition to the tax. In a December letter filed with the Senate Finance Committee, RIMS President John Phelps stated RIMS opposition to the draft because of the “demonstrable negative implications for the global reinsurance market and the United States businesses that rely on this market. The current system allows companies to cede reinsurance, freeing capital to provide more insurance to domestic consumers and thus maintain reasonable premiums.”

Allianz of America, Munich and Swiss Re filed a joint letter stating the reinsurance provisions would “disrupt essential risk distribution practices followed by domestic and foreign insurers, alike; increase premiums and reduce coverage available to U.S. consumers, particularly in catastrophe prone areas along the coastlines.”

James Donelon, Louisiana commissioner of insurance has stated that the discussion draft “could ultimately result in citizens in disaster-prone states like Louisiana being faced with higher premiums for their property insurance.”

Bill Newton, executive director of the Florida Consumer Action Network, expressed similar sentiments. “By increasing taxes on foreign-based reinsurers, consumers would face lower insurance capacity, diminished competition in the insurance market and, most importantly, higher prices. These measures are counterproductive to the job of revitalizing and strengthening the American economy. Ultimately, the cost of increased taxes will not fall on the foreign based reinsurers, but instead on consumers and businesses in Florida and other states.”

While, many continue to oppose the Neal Bill provisions there is one group supportive of the measure. The Coalition for a Domestic Insurance Industry, led by W.R. Berkley Corp., Travelers and Chubb, has consistently supported similar legislation in the past. In a May 21 statement, William R. Berkley, in reference to the re-introduction of the Neal Bill legislation, stated that “closing unintended loopholes to recover lost revenue is one of the best ways to offset the cost of needed tax reform. Closing this loophole, staunching the flow of capital overseas, and restoring competitiveness for this important domestic industry is a win for all.”