Bill Text: NJ SR64 | 2014-2015 | Regular Session | Introduced
Bill Title: Urges reauthorization of federalTerrorism Risk Insurance Program.
Spectrum: Bipartisan Bill
Status: (Passed) 2014-06-26 - Filed with Secretary of State [SR64 Detail]
Download: New_Jersey-2014-SR64-Introduced.html
Sponsored by:
Senator NIA H. GILL
District 34 (Essex and Passaic)
Senator THOMAS H. KEAN, JR.
District 21 (Morris, Somerset and Union)
SYNOPSIS
Urges reauthorization of federal Terrorism Risk Insurance Program.
CURRENT VERSION OF TEXT
As introduced.
A Senate Resolution urging the Congress and President of the United States to reauthorize federally provided terrorism reinsurance for insurers.
Whereas, Insurance protects the United States economy from the adverse effects of the risks inherent in economic growth and development, while also providing the resources necessary to rebuild physical and economic infrastructure, offer indemnification for business disruption, and provide coverage for medical and liability costs from injuries and loss of life in the event of catastrophic losses to persons or property; and
Whereas, The terrorist attack of September 11, 2001 produced insured losses larger than any natural or man-made event in history, with claims paid by insurers to their policyholders eventually totaling some $32.5 billion, making this the second most costly insurance event in United States history; and
Whereas, The sheer enormity of the terrorist induced loss, combined with the possibility of future attacks, produced financial shockwaves that shook insurance markets causing insurers and reinsurers to exclude coverage arising from acts of terrorism from virtually all commercial property and liability policies; and
Whereas, The lack of terrorism risk insurance contributed to a paralysis in the economy, especially in construction, tourism, business travel, and real estate finance; and
Whereas, The United States Congress originally passed the "Terrorism Risk Insurance Act of 2002," Pub. L. 107-297 (TRIA), in which the federal government agreed to provide terrorism reinsurance to insurers and reauthorized this arrangement via the "Terrorism Risk Insurance Extension Act of 2005," Pub. L. 109-144, and the "Terrorism Risk Insurance Program Reauthorization Act of 2007," Pub. L. 110-160 (TRIPRA), which is set to expire on December 31, 2014; and
Whereas, Under TRIPRA the federal government provides reinsurance after industry-wide losses attributable to annual certified terrorism events exceed $100 million; and
Whereas, Coverage under TRIPRA is provided to an individual insurer after the insurer has incurred losses related to terrorism equal to 20 percent of the insurer's previous year's earned premium for property-casualty lines, and, after an individual insurer has reached that threshold, the insurer pays 15 percent of its residual losses and the federal government pays the remaining 85 percent; and
Whereas, The Terrorism Risk Insurance Program has an annual "cap" of $100 billion of aggregate insured losses, beyond which the federal program does not provide coverage; and
Whereas, TRIPRA requires the federal government to recoup 100 percent of the benefits provided under the program via policy holder surcharges to the extent the aggregate insured losses are less than $27.5 billion and enables the government to recoup expenditures beyond that mandatory recoupment amount; and
Whereas, Without question, TRIA and its successors are the principal reason for the continued stability in the insurance and reinsurance market for terrorism insurance, to the benefit of our overall economy; and
Whereas, The presence of a robust private/public partnership has provided stability and predictability and has allowed insurers to actively participate in the market in a meaningful way; and
Whereas, Without a program such as TRIPRA, many of our citizens who want and need terrorism coverage to operate their businesses all across the nation would either be unable to get insurance or unable to afford the limited coverage that would be available; and
Whereas, Without federally provided reinsurance, property and casualty insurers will face less availability of terrorism reinsurance and will therefore be severely restricted in their ability to provide sufficient coverage for acts of terrorism to support our economy; and
Whereas, Despite the hard work and dedication of this nation's counterterrorism agencies and the bravery of the men and women in uniform who fought and continue to fight battles abroad to keep us safe here at home, the threat from terrorist attacks in the United States is both real and substantial and will remain so for the foreseeable future; now, therefore,
Be It Resolved by the Senate of the State of New Jersey:
1. The Senate of the State of New Jersey urges the United States Congress and the President of the United States to reauthorize the Terrorism Risk Insurance Program.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Secretary of the Senate to the President of the United States, the Speaker and Minority Leader of the United States House of Representatives, the Majority and Minority Leaders of the United States Senate, and the members of the New Jersey Congressional delegation.
STATEMENT
This Senate Resolution urges Congress to reauthorize the Terrorism Risk Insurance Program in order to maintain stability in the insurance and reinsurance markets, so that insurers may continue to deliver substantive, direct benefits to businesses, workers, consumers, and the economy overall in the aftermath of a terrorist attack on the United States.
