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Jessica
Hanson
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Phone:
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202-286-5446
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Jessica.Hanson@pciaa.net
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PCI Comments on Administration Proposal to Cut Terrorism Risk
Insurance Program
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WASHINGTON – Robert Gordon, senior vice president of
policy and research development for the Property Casualty Insurers Association
of America (PCI), issued the following statement regarding the Obama
Administration’s 2011 budget provisions cutting the federal government’s
terrorism risk insurance program.
"The Administration's proposed budget includes
provisions to scale back the Terrorism Risk Insurance Program by removing
coverage for domestically-inspired acts of terrorism; increasing private
insurer deductibles and co-payments; and allowing the program to expire at the
end of 2014.
"We believe the Administration's proposal could
have negative ramifications on this important insurance marketplace for
companies to access terrorism coverage.
"As terrorist attacks in Britain and Spain showed
several years ago, the line between foreign-inspired versus domestic terrorism
can often be blurred and it can take months to determine such distinctions.
Retuning to a ‘foreign only’ approach for the program will increase
uncertainty, making private insurers less likely to write primary terrorism
coverage.
"Increasing deductibles and co-payments will also
make private insurers less likely to write primary terrorism coverage. The
current, expanded TRIA private coverage is the result of the much-needed
reforms advanced in 2007.
"The changes proposed by the Administration would
be particularly harmful to the commercial real estate market. A loss of
insurance coverage could disrupt construction projects and extinguish job
growth, undercutting a struggling sector at a critical time in our economic
recovery.
"Congress took positive steps in 2007 with the
passage of a strong, long-term terrorism risk insurance bill and we believe
this should remain in its current form for many more years.
PCI is composed of more than 1,000 member companies,
representing the broadest cross-section of insurers of any national trade
association. PCI members write over $180 billion in annual premium, 37.4
percent of the nation’s property casualty insurance. Member companies write 44
percent of the U.S. automobile insurance market, 30.7 percent of the homeowners
market, 35.1 percent of the commercial property and liability market, and 41.7
percent of the private workers compensation market.
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