Terrorism Risk Insurance Reauthorization Gets Congress’ Attention
Last week the House Financial Services Committee addressed the issue of reauthorization of the Terrorism Risk Insurance Act (TRIA), with committee Chairman Jeb Hensarling (R-TX) stating he felt “skeptical” about the need for reauthorization. This week, the Senate Banking Committee will address the issue with a hearing on Wednesday, September 25.
This Week’s Hearings:
Wednesday, September 25: The Senate Banking Committee will hold a hearing titled “Reauthorizing TRIA: The State of the Terrorism Risk Insurance Market.” The hearing will examine reauthorization of the Terrorism Risk Insurance Act, which is set to expire at the end of 2014.
Wednesday, September 25: The Senate Banking Subcommittee on National Security and International Trade and Finance will hold a hearing titled “Assessing the Investment Climate and Improving Market Access in Financial Services in India.”
FEDERAL ADVISORY COMMITTEE ON INSURANCE HOLDS OPEN MEETING
On Wednesday, September 18, the Federal Advisory Committee on Insurance (FACI) held an open meeting to discuss perspectives on TRIA, regulatory developments regarding reinsurance captives, and international insurance activities. The meeting strongly focused on the importance of reauthorizing TRIA before it expires in 2014. Various FACI members provided presentations regarding some of the challenges in measuring terrorism risk and the capacity of the private market to insure terrorism risk without a government backstop. Designation of globally systemically important insurers (G-SIIs) by the Financial Stability Board (FSB) was also discussed.
FSOC Designates Prudential as SIFI
The Financial Stability Oversight Council (FSOC) voted 7-2 to designate Prudential Financial a systemically important financial institution (SIFI) and increase its oversight by the Federal Reserve. The vote comes after Prudential appealed the initial designation in July; the appeal was eventually overturned by Treasury Secretary Jack Lew. Prudential has signaled it may pursue legal action against the designation, and it has 30 days to do so under law. Additionally, three members of the FSOC released statements of dissent regarding Prudential’s designation.