Extending TRIA Ensures Workers’ Comp Availability

Extending TRIA Ensures Workers’ Comp Availability

WASHINGTON, DC – The Coalition to Insure Against Terrorism (CIAT), which represents business consumers of terrorism risk insurance across a broad range of industries welcomed the findings of a new RAND Corporation study that confirmed the Terrorism Risk Insurance Act (TRIA) is critical to ensuring the availability of workers’ compensation insurance essential to protecting the economy in the event of a major terrorist attack.

The study – conducted by RAND’s Center for Catastrophic Risk Management and Compensation – determined that TRIA provides a financially sound vehicle for ensuring a stable market for workers’ compensation coverage provided by insurers and reinsurers, many of whom otherwise would likely limit the availability of the coverage, especially as it relates to nuclear, biological, chemical or radiological attacks.

Congress has twice reauthorized TRIA – in 2005 and 2007. The program is scheduled to sunset at the end of the year unless extended. “TRIA ensures that workers’ compensation insurance – which is so critical to the American worker – remains available for the business insurance consumers who depend upon it,” said Martin DePoy, spokesperson for CIAT. “This coverage is critically important, especially when tragedy strikes.”

TRIA has provided critical stability to the workers’ compensation insurance marketplace since it was enacted in the wake of 9/11. After the attacks, reinsurers and primary insurers – after paying out more than $30 billion in claims – withdrew from the terrorism risk insurance marketplace. According to RAND, the absence of coverage contributed to massive job losses and billions of dollars in damage to industries dependent upon the availability of terrorism risk coverage. TRIA allowed businesses to once again purchase insurance, while protecting the economy against highly unpredictable, catastrophic terrorist attacks.