Marsh & McLennan Companies Urges Lawmakers to Reauthorize Terrorism Risk Insurance Act During U.S. House of Representatives H...
19 9월 2013 - 11:30PM
Business Wire
Earlier today, Peter J. Beshar, Executive Vice President and
General Counsel of Marsh & McLennan Companies, testified before
the United States House of Representatives Committee on Financial
Services on the future of the Terrorism Risk Insurance Act (TRIA).
Congress is weighing whether to reauthorize TRIA, which is set to
expire on December 31, 2014. Marsh & McLennan Companies
strongly supports reauthorization and modernization of the Act.
“We consider TRIA to be a model public-private partnership. TRIA
restored insurance capacity at a critical time after 9-11 and
continues to be the backbone of a healthy terrorism insurance
market,” said Mr. Beshar.
In April, Marsh released its 2013 Terrorism Risk Insurance
Report, a comprehensive look at the terrorism insurance market. A
survey of more than 2,500 Marsh clients demonstrated that demand
for terrorism risk insurance remains strong and that the TRIA
program plays a major part in the availability and affordability of
coverage. According to the report, 62% of Marsh’s clients purchased
property terrorism coverage backed by TRIA in 2012. "Our clients
across the United States — including real estate developers, media
companies, health care organizations and educational institutions —
need and want terrorism coverage and would be less likely to get it
without TRIA."
“In our judgment, the existence of a private terrorism insurance
market, backstopped by TRIA, actually serves to protect the
government and taxpayers from absorbing virtually all of the
financial loss in the event of a terrorist attack," Mr. Beshar
said.
The Company also offered three recommendations for refinement of
the program including:
- Specific clarification that coverage is
provided by TRIA for all forms of terrorism — including nuclear,
biological, chemical and radiological events — if coverage is
afforded on the primary policy.
- Modernization of TRIA to reflect new
terrorist threats that have emerged — in particular, the risk of
cyber terrorism.
- Establishment of a 90-day time period
for determining whether or not an act of terrorism is covered by
TRIA.
Mr. Beshar’s testimony comes just one day after Marsh &
McLennan Companies representatives shared their views on TRIA with
the Director of the Federal Insurance Office. At yesterday's
meeting of the Federal Advisory Committee on Insurance (FACI),
Christopher Flatt, leader of Marsh’s Workers’ Compensation Center
of Excellence, and Aaron D. Bueler, managing director and leader of
Guy Carpenter’s workers compensation practice and terrorism task
force, presented the Company’s views.
After addressing FACI, Mr. Bueler stated: “The continuation of
TRIA is essential. Non-renewal or a major change in the program
will negatively affect the affordability and availability of
commercial lines insurance vital to the economy. Since TRIA’s
enactment in 2002, the terrorism reinsurance market has become a
critical component of risk management strategy for many insurers. A
dramatic change in the federal backstop could lead to a contraction
in both the insurance and reinsurance marketplace.”
Mr. Flatt stressed that TRIA affects the state-regulated
workers’ compensation market, especially in the areas of pricing
and capacity. “The uncertainty in the market is causing some
carriers to reduce their available capacity and aggregate exposures
in large cities, and workers’ compensation prices on these risks
are certainly going up,” he told members of FACI.
The Act has been extended twice since originally enacted in
November 2002 as a response to the attacks of September 11,
2001.
Mr. Beshar was invited to share Marsh & McLennan's views on
TRIA with the Senate Banking Committee at a hearing that has been
scheduled for September 25.
About Marsh & McLennan Companies
MARSH & McLENNAN COMPANIES (NYSE: MMC) is a global
professional services firm offering clients advice and solutions in
the areas of risk, strategy, and human capital. Marsh is a global
leader in insurance broking and risk management; Guy Carpenter is a
global leader in providing risk and reinsurance intermediary
services; Mercer is a global leader in talent, health, retirement,
and investment consulting; and Oliver Wyman is a global leader in
management consulting. Marsh & McLennan Companies’ 54,000
colleagues worldwide provide analysis, advice, and transactional
capabilities to clients in more than 100 countries. The Company
prides itself on being a responsible corporate citizen and making a
positive impact in the communities in which it operates. Visit
www.mmc.com for more information.
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