“The ripple effects of the September 11th attacks touch every area of our economy.  This plan will encourage insurance providers to continue investing in new construction and community development projects,” said Rep. Capito.

In the wake of the September 11th tragedy, commercial insurers and policyholders have been deeply concerned about the withdrawal of the reinsurance industry from providing coverage for future terrorist attacks.  Reinsurers serve as the main risk-spreading mechanism for primary insurers, which offer coverage directly to consumers.  Without this ability to spread risk to other companies through reinsurance, primary insurers may be compelled to act similarly, leaving many businesses with little or no coverage for terrorism. 

While insurers have said they will be able to absorb the estimated $25-$60 billion loss resulting from the events of September 11, there is concern that without adequate reinsurance any future incident of like size could threaten the stability of the commercial property/casualty insurance industry. 

“We need to act now so that West Virginians can continue to receive affordable individual insurance policies,” said Rep. Capito.  “No terrorist attacks will threaten West Virginia insurance.” 
“This is a national economic problem that demands a national solution.  Affordable, available terrorism insurance is necessary for the economy to function efficiently,” said Rep. Capito.

Summary of Terrorism Risk Protection Act: 

• Establishes a risk-sharing plan for the commercial property/casualty insurance industry based on State catastrophic insurance funds and insurance guarantee funds used successfully by almost every State in the country.  
• Provides an immediate 90% risk spreading assistance by the Federal government in the event of a terrorist event of over $1 billion (or a lower trigger based on individual company losses).  
• Creates a flexible repayment schedule based on economic conditions for commercial insurers in the event of losses up to $20 billion.  
• Improves the availability of terrorism insurance coverage by allowing insurers to set aside very limited segregated reserve accounts that can only be used for terrorism losses.