Banking Chairs Side With Treasury on TRIA

The House and Senate banking committee chairmen are lining up with Treasury Secretary John W. Snow in support of a scaled-backed extension of a federal terrorism insurance program that is due to expire at the end of this year.Sen. Richard Shelby, R-Ala., the Senate Banking Committee chairman, said the Terrorism Risk Insurance Act of 2002 was necessary to "calm disruptions in the insurance markets" in the wake of the Sept. 11 terrorist attacks. "However, any extension of TRIA should be narrow, targeted, and minimize interference with the markets," Sen. Shelby said. House Financial Services Committee Chairman Michael Oxley, R-Ohio, noted that a Treasury report shows that TRIA may be inhibiting development of a long-term private terrorism insurance market. "As a result, a simple extension of the program is not in the best interest of American consumers or the economy," he said. Meanwhile, the Coalition to Insure Against Terrorism blasted the Treasury study. "The study's assertion that the now partial presence of reinsurers will somehow grow stronger in the absence of a federal backstop defies logic," the coalition said. CIAT, which represents lenders, real estate interests, and other business insurance policyholders, maintains that some kind of federal terrorism insurance program must remain in place next year.