American Property Casualty Insurance Association
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Contact:

Eileen Gilligan

Phone:

202-639-0497

Email:

Eileen.Gilligan@pciaa.net

 

 

FOR RELEASE ON RECEIPT

May 7, 2014

PCI Applauds RAND Study on the Impact on Workers’ Compensation if TRIA Expires

 

WASHINGTON - Robert Gordon, senior vice president, policy development and research for the Property Casualty Insurers Association of America (PCI), today commended a study released by the RAND Center for Catastrophic Risk Management and Compensation’s study, “The Impact on Workers’ Compensation Insurance Markets of Allowing the Terrorism Risk Insurance Act (TRIA) to Expire.”

“RAND’s study underscores the importance of TRIA to the workers compensation market,” said Gordon. “The study noted that losses in workers’ compensation could be ‘more than $10 billion from a large conventional attack (10-ton truck bomb) and more than $300 billion from a nuclear attack.’ Workers compensation insurance provides wage replacement and medical benefits to workers who are injured on the job. But under state law, workers compensation insurers cannot exclude terrorism risk. So reauthorization of the TRIA program is critical for the continued protection of injured workers and their employers,” said Gordon.

According to RAND, in the absence of TRIA, workers compensation insurance for employers who present a high geographic concentration of potential losses could be limited or unavailable. If the scenario RAND projects occurs, those employers may have to seek coverage in the residual market where, ultimate losses from a catastrophic attack would be financed, in significant part, by businesses and taxpayers. The report notes that “TRIA, in contrast, spreads such risk across the country.”

“PCI is very thankful that the Senate and House are moving expeditiously to reauthorize TRIA. However, PCI is extremely concerned that potential increases in insurer exposure to loss under some reauthorization proposals could force many workers compensation insurers to pull out of some markets to reduce geographic aggregations of risk,” said Gordon. “Congress must renew the current TRIA program with minimal changes to ensure that the program can continue to protect injured employees, their employers, insurers, and the American economy,” concluded Gordon.

This is the third and final report in a series RAND reports on TRIA. PCI is a co-sponsor of the research.

The report can be found here

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $195 billion in annual premium, 39 percent of the nation’s property casualty insurance. Member companies write 46 percent of the U.S. automobile insurance market, 32 percent of the homeowners market, 37 percent of the commercial property and liability market, and 41 percent of the private workers compensation market.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $195 billion in annual premium, 39 percent of the nation’s property casualty insurance. Member companies write 46 percent of the U.S. automobile insurance market, 32 percent of the homeowners market, 37 percent of the commercial property and liability market, and 41 percent of the private workers compensation market.

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