TERRORISM RISK INSURANCE - June 3, 2016 Roundtable Weekly

Coalition to Insure Against Terrorism Details Concerns Over Proposed TRIA Changes  

The Roundtable, working through the Coalition to Insure Against Terrorism (CIAT), raised concerns about proposed changes to the Terrorism Risk Insurance Act (TRIA) in a comment letter submitted Tuesday to the Department of Treasury's Federal Insurance Office (FIO). 

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The Roundtable, working through the Coalition to Insure Against Terrorism (CIAT), raised concerns about proposed changes to the Terrorism Risk Insurance Act (TRIA) this week.

The comments were submitted in response to a Notice of Proposed Rulemaking (NRPM) issued by the Department of Treasury's Federal Insurance Office (FIO) on April, 2016 regarding the implementation of the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA).  TRIPRA requires the Department of the Treasury to issue proposed rules to implement changes to the Terrorism Risk Insurance Program (TRIP). Many of the proposed changes were intended to bring the regulations up to date based on the terms of TRIPRA. 

CIAT's comments focused on three primary aspects of the NRPM: the program's certification process; the operation of captive insurance companies under TRIPRA; and the insurance marketplace aggregate retention amount.

As stated in the comment letter, CIAT supports improvements to the manner in which an act of terrorism is “certified” under TRIA and supports the implementation of a timeline as required in the 2015 Reauthorization Act.

CIAT encouraged Treasury to recognize that "captive insurers" are typically just one piece of an overall risk-management program, and any specific rules regarding their participation in TRIA should be sufficiently flexible.

CIAT also commented that the rules as proposed in the NPRM, which allow payment if insurer “is prepared to pay” its losses, are sufficient to accommodate the need for captives to receive reimbursement prior to paying its claims.

Finally, CIAT wrote that the process to determine the insurance marketplace aggregate retention amount to be adequate and aligned with the requirements under the statute.

The Roundtable’s Risk Management Working Group worked with partners in the Coalition to Insure Against Terrorism (CIAT) to review Treasury’s  requests and draft appropriate responses.  (Roundtable Weekly, April 8)

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