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Regular Session, 2014
HOUSE RESOLUTION NO. 42
BY REPRESENTATIVE CROMER
INSURANCE: Memorializes congress to reauthorize the Terrorism Risk Insurance Program
A RESOLUTION1
To memorialize the United States Congress to take such actions as are necessary to2
reauthorize the Terrorism Risk Insurance Program.3
WHEREAS, insurance protects the United States economy from the adverse effects4
of the risks inherent in economic growth and development while also providing the resources5
necessary to rebuild physical and economic infrastructure, offer indemnification for business6
disruption, and provide coverage for medical and liability costs from injuries and loss of life7
in the event of catastrophic losses to persons or property; and8
WHEREAS, the terrorist attack of September 11, 2001, produced insured losses9
larger than any natural or man-made event in history, with claims paid by insurers to their10
policyhol ders eventually totaling some thirty-two billion, five hundred million dollars,11
making this the second most costly insurance event in United States history; and12
WHEREAS, the sheer enormity of the terrorist-induced loss, combined with the13
possibility of future attacks, produced financial shockwaves that shook insurance markets14
causing insurers and reinsurers to exclude coverage arising from acts of terrorism from15
virtually all commercial property and liability policies; and16
WHEREAS, the lack of terrorism risk insurance contributed to a paralysis in the17
economy, especially in construction, tourism, business travel, and real estate finance; and18 HLS 14RS-1863 ORIGINAL
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WHEREAS, the United States Congress originally passed the Terrorism Risk1
Insurance Act of 2002, in which the federal government agreed to provide terrorism2
reinsurance to insurers and reauthorized this arrangement via the Terrorism Risk Insurance3
Extension Act of 2005, and the Terrorism Risk Insurance Program Reauthorization Act of4
2007 (TRIPRA); and5
WHEREAS, under TRIPRA the federal government provides such reinsurance after6
industry-wide losses attributable to annual certified terrorism events exceed one hundred7
million dollars; and8
WHEREAS, coverage under TRIPRA is provided to an individual insurer after the9
insurer has incurred losses related to terrorism equal to twenty percent of the insurer's10
previous year earned premium for property-casualty lines; and11
WHEREAS, after an individual insurer has reached such a threshold, the insurer pays12
fifteen percent of residual losses and the federal government pays the remaining eighty-five13
percent; and14
WHEREAS, the Terrorism Risk Insurance Program has an annual cap of one hundred15
billion dollars of aggregate insured losses, beyond which the federal program does not16
provide coverage; and17
WHEREAS, TRIPRA requires the federal government to recoup one hundred percent18
of the benefits provided under the program via policyholder surcharges to the extent the19
aggregate insured losses are less than twenty-seven billion five hundred million dollars and20
enables the government to recoup expenditures beyond that mandatory recoupment amount;21
and22
WHEREAS, without question, TRIPRA and its successors are the principal reason23
for the continued stability in the insurance and reinsurance market for terrorism insurance24
to the benefit of our overall economy; and25
WHEREAS, the presence of a robust private and public partnership has provided26
stability and predictability and has allowed insurers to actively participate in the market in27
a meaningful way; and28 HLS 14RS-1863 ORIGINAL
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WHEREAS, without a program such as TRIPRA, many of our citizens who want and1
need terrorism coverage to operate their businesses all across the nation would be either2
unable to get insurance or unable to afford the limited coverage that would be available; and3
WHEREAS, without federally provided reinsurance, property and casualty insurers4
will face less availability of terrorism reinsurance and will therefore be severely restricted5
in their ability to provide sufficient coverage for acts of terrorism to support our economy;6
and7
WHEREAS, despite the hard work and dedication of this nation's counterterrorism8
agencies and the bravery of the men and women in uniform who fought and continue to fight9
battles abroad to keep us safe here at home, the threat from terrorist attacks in the United10
States is both real and substantial and will remain as such for the foreseeable future.11
THEREFORE, BE IT RESOLVED that the House of Representatives of the12
Legislature of Louisiana hereby memorializes the United States Congress to reauthorize the13
Terrorism Risk Insurance Program.14
BE IT FURTHER RESOLVED that a copy of this Resolution shall be transmitted15
to the secretary of the United States Senate and the clerk of the United States House of16
Representatives and to each member of the Louisiana delegation to the United States17
Congress.18
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Cromer HR No. 42
Memorializes congress to reauthorize the Terrorism Risk Insurance Program.