Most people aren't aware that one of the bigger financial impacts of the 9/11 attacks was on the insurance industry. The federal government enacted the Terrorism Risk Insurance Act to protect insurance companies from catastrophic loss in the event of massive claims related to a future terror attack. The act was extended for two years in 2005, and is up for reauthorization this year. Behind the scenes, it is one of the more high-stake lobbying priorities of the year:
Big insurers won the first round in the battle over extending the Terrorism Risk Insurance Act of 2002, when two Democrats introduced a provision within the bill that would add coverage for nuclear, biological, chemical and radiological (NBCR) attacks.
Massachusetts Reps. Barney Frank, chairman of the House Financial Services Committee, and Michael E. Capuano introduced the legislation on June 18. House sources expect it will pass there but have no idea how it will fare in the Senate; if the bill passes there, it could still fail, because the Bush administration opposes TRIA's extension.
Steve Adamske, Frank's press secretary, said the congressman included the NBCR provision because it is not available anywhere in the private market "and will probably will never be available in the private market."
It's my impression that TRIA doesn't cost taxpayers much, unless a successful terror attack requires the outlay of significant federal dollars to back up claims.
Of course, if there were a successful terror attack and there was no such thing as TRIA, the federal government would step in anyway, to ensure the money was there for reconstruction. So it could be that TRIA actually saves us money -- by ensuring the availability of private reconstruction dollars through insurers, that would otherwise be borne by the federal government.
I just find it interesting to see examples of how deeply and completely the federal government touches our lives every day.
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