Expiration Of TRIPRA On December 31 Creates Insurance Marketplace Uncertainty

Expiration Of TRIPRA On December 31 Creates Insurance Marketplace Uncertainty

Dec 31, 2014

Concerns Raised About Potential Coverage Gaps Without Federal Backstop

NEW YORK, December 31, 2014 — The imminent expiration of the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) on December 31, 2014 has created uncertainty in the insurance marketplace, according to Marsh & McLennan Companies, Inc. (NYSE: MMC), a global professional services firm offering clients advice and solutions in risk, strategy, and human capital. With Congress having adjourned for winter recess on December 16,, 2014 without renewing TRIPRA, the resulting lack of clarity about terrorism coverage as of January 1, 2015 has prompted concerns and contingency planning for potentially affected coverage including casualty, workers’ compensation, general liability, excess liability and umbrella policies.

Marsh & McLennan Companies includes subsidiaries Marsh, a global leader in insurance broking and risk management, and Guy Carpenter, a global leader in risk and reinsurance intermediary services. Marsh and Guy Carpenter are working closely with clients to assess their specific needs and address questions and concerns, including:

  1. When the new Congress convenes on January 6, 2015, is it expected that it will act quickly to renew TRIPRA?
  2. If renewed, will Congress pass the 2014 version of TRIPRA or will it undertake a new version?
  3. If TRIPRA is not immediately renewed, is the stand-alone commercial terrorism market prepared to handle the rush of business that could come its way?
  4. If this ensues, will the stand-alone commercial terrorism market be able to provide adequate coverage levels?
  5. Are underwriters still willing to issue policies for workers’ compensation in major urban areas without TRIPRA?
  6. What are the early trends from the reinsurance market in terms of additional capacity being deployed for terrorism — and at what price?
  7. Are short- and longer-term solutions available while TRIPRA renewal is in limbo?

Through its Government Relations department, Marsh & McLennan continues to engage with policymakers in Washington and industry organizations to explain the importance of prompt renewal of TRIPRA.