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Regular Session, 2014
HOUSE RESOLUTION NO. 42
BY REPRESENTATIVE CROMER
A RESOLUTION
To memorialize the United States Congress to take such actions as are necessary to
reauthorize the Terrorism Risk Insurance Program.
WHEREAS, insurance protects the United States economy from the adverse effects
of the risks inherent in economic growth and development while also providing the resources
necessary to rebuild physical and economic infrastructure, offer indemnification for business
disruption, and provide coverage for medical and liability costs from injuries and loss of life
in the event of catastrophic losses to persons or property; and
WHEREAS, the terrorist attack of September 11, 2001, produced insured losses
larger than any natural or man-made event in history, with claims paid by insurers to their
policyholders eventually totaling some thirty-two billion, five hundred million dollars,
making this the second most costly insurance event in United States history; and
WHEREAS, the sheer enormity of the terrorist-induced loss, combined with the
possibility of future attacks, produced financial shockwaves that shook insurance markets
causing insurers and reinsurers to exclude coverage arising from acts of terrorism from
virtually all commercial property and liability policies; and
WHEREAS, the lack of terrorism risk insurance contributed to a paralysis in the
economy, especially in construction, tourism, business travel, and real estate finance; and
WHEREAS, the United States Congress originally passed the Terrorism Risk
Insurance Act of 2002, in which the federal government agreed to provide terrorism
reinsurance to insurers and reauthorized this arrangement via the Terrorism Risk Insurance
Extension Act of 2005, and the Terrorism Risk Insurance Program Reauthorization Act of
2007 (TRIPRA); and ENROLLEDHR NO. 42
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WHEREAS, under TRIPRA the federal government provides such reinsurance after
industry-wide losses attributable to annual certified terrorism events exceed one hundred
million dollars; and
WHEREAS, coverage under TRIPRA is provided to an individual insurer after the
insurer has incurred losses related to terrorism equal to twenty percent of the insurer's
previous year earned premium for property-casualty lines; and
WHEREAS, after an individual insurer has reached such a threshold, the insurer pays
fifteen percent of residual losses and the federal government pays the remaining eighty-five
percent; and
WHEREAS, the Terrorism Risk Insurance Program has an annual cap of one hundred
billion dollars of aggregate insured losses, beyond which the federal program does not
provide coverage; and
WHEREAS, TRIPRA requires the federal government to recoup one hundred percent
of the benefits provided under the program via policyholder surcharges to the extent the
aggregate insured losses are less than twenty-seven billion five hundred million dollars and
enables the government to recoup expenditures beyond that mandatory recoupment amount;
and
WHEREAS, without question, TRIPRA and its successors are the principal reason
for the continued stability in the insurance and reinsurance market for terrorism insurance
to the benefit of our overall economy; and
WHEREAS, the presence of a robust private and public partnership has provided
stability and predictability and has allowed insurers to actively participate in the market in
a meaningful way; and
WHEREAS, without a program such as TRIPRA, many of our citizens who want and
need terrorism coverage to operate their businesses all across the nation would be either
unable to get insurance or unable to afford the limited coverage that would be available; and
WHEREAS, without federally provided reinsurance, property and casualty insurers
will face less availability of terrorism reinsurance and will therefore be severely restricted
in their ability to provide sufficient coverage for acts of terrorism to support our economy;
and ENROLLEDHR NO. 42
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WHEREAS, despite the hard work and dedication of this nation's counterterrorism
agencies and the bravery of the men and women in uniform who fought and continue to fight
battles abroad to keep us safe here at home, the threat from terrorist attacks in the United
States is both real and substantial and will remain as such for the foreseeable future.
THEREFORE, BE IT RESOLVED that the House of Representatives of the
Legislature of Louisiana hereby memorializes the United States Congress to reauthorize the
Terrorism Risk Insurance Program.
BE IT FURTHER RESOLVED that a copy of this Resolution shall be transmitted
to the secretary of the United States Senate and the clerk of the United States House of
Representatives and to each member of the Louisiana delegation to the United States
Congress.
SPEAKER OF THE HOUSE OF REPRESENTATI VES