HR1076 98TH GENERAL ASSEMBLY


  

 


 
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1
HOUSE RESOLUTION

 
2    WHEREAS, Insurance protects the United States economy from
3the adverse effects of the risks inherent in economic growth
4and development while also providing the resources necessary to
5rebuild physical and economic infrastructure, offer
6indemnification for business disruption, and provide coverage
7for medical and liability costs from injuries and loss of life
8in the event of catastrophic losses to persons or property; and
 
9    WHEREAS, The terrorist attack of September 11, 2001
10produced insured losses larger than any natural or man-made
11event in history; claims paid by insurers to their
12policyholders eventually totaled some $32.5 billion, making
13this the second most costly insurance event in United States
14history; and
 
15    WHEREAS, The sheer enormity of the terrorist-induced loss,
16combined with the possibility of future attacks, produced
17financial shockwaves that shook insurance markets, causing
18insurers and reinsurers to exclude coverage arising from acts
19of terrorism from virtually all commercial property and
20liability policies; and
 
21    WHEREAS, The lack of terrorism risk insurance contributed
22to a paralysis in the economy, especially in construction,

 

 

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1tourism, business travel, and real estate finance; and
 
2    WHEREAS, The United States Congress originally passed the
3Terrorism Risk Insurance Act of 2002, Pub. L. 107-297 (TRIA),
4in which the federal government agreed to provide terrorism
5reinsurance to insurers and reauthorized this arrangement via
6the Terrorism Risk Insurance Extension Act of 2005, Pub. L.
7109-144, and the Terrorism Risk Insurance Program
8Reauthorization Act of 2007, Pub. L. 110-160 (TRIPRA); and
 
9    WHEREAS, Under TRIPRA, the federal government provides
10such reinsurance after industry-wide losses attributable to
11annual certified terrorism events exceed $100 million; and
 
12    WHEREAS, Coverage under TRIPRA is provided to an individual
13insurer after the insurer has incurred losses related to
14terrorism equal to 20% of the insurer's previous year earned
15premium for property-casualty lines; and
 
16    WHEREAS, After an individual insurer has reached such a
17threshold, the insurer pays 15% of residual losses and the
18federal government pays the remaining 85%; and
 
19    WHEREAS, The Terrorism Risk Insurance Program has an annual
20cap of $100 billion of aggregate insured losses, beyond which
21the federal program does not provide coverage; and
 

 

 

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1    WHEREAS, TRIPRA requires the federal government to recoup
2100% of the benefits provided under the program via policy
3holder surcharges to the extent the aggregate insured losses
4are less than $27.5 billion and enables the government to
5recoup expenditures beyond that mandatory recoupment amount;
6and
 
7    WHEREAS, Without question, TRIA and its successors are the
8principal reason for the continued stability in the insurance
9and reinsurance market for terrorism insurance to the benefit
10of our overall economy; and
 
11    WHEREAS, The presence of a robust private/public
12partnership has provided stability and predictability and has
13allowed insurers to actively participate in the market in a
14meaningful way; and
 
15    WHEREAS, Without a program such as TRIPRA, many citizens
16who want and need terrorism coverage to operate their
17businesses all across the nation would be either unable to get
18insurance or unable to afford the limited coverage that would
19be available; and
 
20    WHEREAS, Without federally provided reinsurance, property
21and casualty insurers will face less availability of terrorism

 

 

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1reinsurance and will therefore be severely restricted in their
2ability to provide sufficient coverage for acts of terrorism to
3support our economy; and
 
4    WHEREAS, Unfortunately, despite the hard work and
5dedication of this nation's counterterrorism agencies and the
6bravery of the men and women in uniform who fought and continue
7to fight battles abroad to keep us safe here at home, the
8threat from terrorist attacks in the United States is both real
9and substantial and will remain as such for the foreseeable
10future; therefore, be it
 
11    RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
12NINETY-EIGHTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that
13we urge Congress and the President of the United States to
14reauthorize the Terrorism Risk Insurance Program; and be it
15further
 
16    RESOLVED, That suitable copies of this resolution be
17delivered to the President of the United States, the Speaker
18and Clerk of the United States House of Representatives, the
19President Pro Tempore and the Secretary of the United States
20Senate, and the members of the Illinois congressional
21delegation.