White House Touts Terror Insurance Backstop

A study by the President's Working Group says the availability of terrorism insurance has improved under a government program that provides a federal backstop for private insurers."While there are inherent difficulties in evaluating the long-term nature of the terrorism risk insurance market, with the government program in place, a number of positive developments have occurred" since the September 2001 terrorist attacks, the PWG report says. The Terrorist Risk Insurance Act is due to expire Dec. 31, 2007, and the Coalition to Insure Against Terrorism will be urging Congress to make the federal program permanent next year. "Today, even with the TRIA backstop, reinsurers are not meeting the capacity demand of primary insurers for their deductible and co-insurance layers," coalition chairman Martin DePoy said. This fact "refutes" the notion that the federal backstop is negatively affecting the emergence of private reinsurance capacity, he said. The PWG report does not include a recommendation to extend TRIA.