CFA Urges Congress to Eliminate the Terrorism Risk Insurance Act
CFA urges the U. S. House Financial Services Committee to review the extraordinary growth and level of the property/casualty insurance industry’s surplus capital as Congress contemplates the next steps for the temporary Terrorism Risk Insurance Act (TRIA). It is CFA's assessment that industry has the capacity to insure properties against terrorism losses without continuing the massive taxpayer subsidies it has been provided under TRIA, and believe the program should not be renewed. As the letter discusses, an alternative to ending TRIA would be to charge an actuarially sound premium to insurers for the federal backstop that TRIA makes available. In the event of any extension, a 10-year extension is excessive and will not allow for the private reinsurance market to develop to handle this manageable risk.
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