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Insuring America's Economy Against Terrorism - Videotaped remarks by Thomas J. Donohue
U.S. Chamber of Commerce
March 17, 2005
Good morning. I'm Tom Donohue, president and CEO of the U.S. Chamber of Commerce. I'm sorry I am unable to be there with you, but I'm pleased to have this opportunity to say a few words about terrorism insurance.
I'll be brief and to the point. It is absolutely vital to U.S. economic interests that Congress extend the Terrorism Risk Insurance Act of 2002 – and do so sooner rather than later.
Without an effective public/private partnership that ensures the availability of comprehensive and affordable terrorism insurance for companies, commercial property developers, owners, and tenants, our economy will suffer a tremendous blow.
The construction, purchase, and leasing of new buildings and shopping malls—or any structure that holds a lot of people—could be cancelled or postponed, destroying jobs and economic development in communities all over the country.
How do we know this? Because it already happened – right after 9/11, when the private terrorism insurance market essentially evaporated.
To its credit, Congress recognized the terrorism insurance crisis following 9/11 and passed the Terrorism Risk Insurance Act of 2002, which creates a partnership between the government and the private sector in providing businesses with a much-needed sense of security.
Despite efforts to better protect the United States against terrorism, not enough has changed since 9/11 that would justify allowing the Terrorism Risk Insurance Act to go away at the end of this year.
Catastrophic terrorism remains an uninsurable risk because its frequency and location cannot be predicted, and its potential scale could be devastating.
Let's face facts—every assumption about life in America, the threats we face, and the risks we take were thrown out the window after 9/11.
Because of this new environment, private reinsurers are no closer to returning to the market today than they were immediately following 9/11.
That is why Terrorism Risk Insurance Act needs to be extended—and now, not later.
Why the urgency? Because companies that are now negotiating insurance policy renewals for next year and beyond are finding that their terrorism coverage will be severely limited or dropped altogether if TRIA is not extended.
In other words, the consequences of not extending TRIA do not begin to surface after the December 31st expiration date – they have already begun to surface.
Finally, let's not forget the important link between terrorism insurance legislation and the health and safety of America's workers. How will we address workers' compensation in a world without a terrorism insurance backstop against catastrophic loss?
The connection between terrorism insurance and workers' comp is not well understood, and that's why it will be addressed at today's meeting.
Ladies and gentlemen, extending TRIA is necessary to:
-Spur economic growth;
-Remove uncertainty about the availability of terrorism insurance beyond this year; and
-Allow Congress sufficient time to consider alternative solutions to insuring catastrophic terrorism risk.
The Chamber has positioned itself front and center on this issue. We have worked to unite the business community, and we're working closely with key members of Congress, including the ones you will hear from today.
Thank you for helping the Chamber make this issue a top national priority. Have a great meeting.