BOSCOLA CALLS ON CONGRESS TO EXTEND TERRORISM RISK INSURANCE PROGRAM

BETHLEHEM (July 13) - State Senator Lisa M. Boscola wants to protect taxpayers and small businesses from a $100-billion “gap” in terrorism insurance that could devastate Pennsylvania’s economy. 

In 2002, Congress enacted the Terrorism Risk Insurance Act (TRIA), which guaranteed that the federal government would pay about 90% of an insurer's post-deductible losses, capped at $100 billion a year. 

TRIA will expire on December 31, 2005, but Boscola has introduced a Senate Resolution calling on Congress to extend the program. 

“The September 11^th terrorist attacks changed the global insurance market significantly,” Boscola said.  “TRIA has effectively worked to provide some measure of insurance for American jobs and American companies against the risk of terrorism.  Congress did the right thing three years ago and they need to do the right thing again.  This law needs to be extended.” 

TRIA plays a critically important role in our nation’s response to terrorism and helped restore a greater sense of economic security and stability after the terrorist attacks on 9/11, Boscola said.

Extending the Terrorism Risk Insurance Act would ensure the continued availability and affordability of terrorism insurance during the short-term.  An extension would also give Pennsylvania businesses time to find comparable coverage on the private market, according to Boscola. 

“Extending TRIA is important to prevent drastic instability in the insurance market and in Pennsylvania’s economy,” Boscola said.

In a letter to Congressman Charles Dent and Senators Arlen Specter and Rick Santorum, Boscola notes that since the Lehigh Valley is the third largest metropolitan area in Pennsylvania, their support for an extension of TRIA before the December 31, 2005 deadline is critically needed. 

“Although TRIA is not set to expire until December 31, 2005, it is essential that Congress acts quickly to extend this program,” Boscola said.  “Without government backing, it will be much more difficult to find affordable terrorism insurance.”

If TRIA is not extended soon, commercial consumers may find it increasingly difficult to obtain terrorism insurance, as insurers would be forced to evaluate each policy on the assumption that TRIA’s backstop will cease for at least a portion of the coverage period. This could eventually shift more risks of terrorism to taxpayers and businesses, according to Boscola. 

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To obtain a copy of the letter sent to Dent, Santorum and Specter, please feel free to contact Senator Boscola's office at (610) 868-8667.