Treasury's June 30 study, which recommended against renewing TRIA as it currently stands, mentions the earlier inquiry into group life coverage, but makes no specific recommendations about whether the line of insurance should be included in any successor program. However, in a letter to the chairmen and ranking members of the Senate Banking Committee and House Financial Services Committee, Treasury Secretary John Snow said the Bush Administration only could support some form of program going forward provided it excludes commercial auto, general liability and other lines considered "less subject to aggregation risks."
The administration also seeks a program that increases the insurance industry's dollar deductibles and percentage co-payments, and is guaranteed to only be triggered by events larger than $500 million in insured losses.
But according to Keating, ACLI believes "that lives, not just brick and mortar, should be included in TRIA."
"More than 160 million Americans have group life insurance coverage," Keating said. "For many of them, their employer-sponsored term life insurance is their only source of life insurance. That is why the ACLI believes it is critical that the U.S. government assist the group life insurance industry to assure that this critical life insurance coverage continues to be available to the millions of Americans who rely on the promised survivor benefit of their group life policy."
According to the RAND Institute for Civil Justice, the life insurance industry suffered losses of $1 billion in the Sept. 11 attacks. In June 2003, Swiss Re estimated group life insurance accounted for less than half of the total.
Nonetheless, at last month's National Association of Insurance Commissioners Summer National Meeting in Boston, the Terrorism Insurance Implementation Working Group of the NAIC's Property and Casualty Committee passed a resolution urging Congress to include group life insurance coverage in any eventual terrorism risk measure, including a long-term solution or, more immediately, a two-year renewal, which the industry has desired.
Group life is also included under reauthorization bills introduced in both the House and Senate, each of which would extend the current TRIA program for an additional two years.
Senate Banking Committee Chairman Richard Shelby, R-Ala., said last week he will schedule a fresh round of hearings on whether to modify, replace or cancel the federal Terrorism Risk Insurance Program in light of a Treasury Department study that recommends against renewing the program in its current form, the committee's chairman said. House Financial Services Committee Chairman Michael Oxley pledged he would pursue a similar inquiry.