Treasury Opposes TRIA Extension

Citing improved economic performance since 2002, the Treasury Department has told Congress that the Bush administration opposes the extension of the Terrorism Risk Insurance Act of 2002 in its current form.In a June 30 letter to Congress mandated by TRIA, Treasury Secretary John W. Snow said any extension of the program should increase the event size that triggers coverage to $500 million, raise deductibles and co-payments, and eliminate certain lines of insurance. "It is our view that continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding out innovation and capacity building," Secretary Snow said. He also noted that TRIA covers civil damages after a terrorist attack. "Current litigation rules would allow unscrupulous trial lawyers to profit from a terrorist attack and would expose the American taxpayer to excessive and inappropriate costs," the secretary said. TRIA was enacted after 9/11 to create a temporary federal program to ensure the availability of terrorism insurance. Mr. Snow said TRIA has been effective, but noted that gross domestic product grew from 2.3% in 2002 to 3.9% in 2004 and argued that extending TRIA "would have little impact on the economy given its current strength."