[Congressional Record Volume 152, Number 10 (Wednesday, February 1, 2006)]
[Extensions of Remarks]
[Page E48]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    H.R. 4314, THE ``TERRORISM RISK INSURANCE REVISION ACT OF 2005''

                                 ______
                                 

                          HON. JEB HENSARLING

                                of texas

                    in the house of representatives

                      Wednesday, February 1, 2006

  Mr. HENSARLING. Mr. Speaker, extraordinary times call for 
extraordinary measures. Our Nation has had to respond to the attacks of 
September 11th in many different ways, including providing Federal 
support for our terrorism insurance market.
  While I can understand support for an extension of TRIA, I have many 
concerns about the piece of legislation we will be voting on shortly. 
Let me highlight a few of them.
  First, this bill greatly expands the TRIA program, going so far as to 
provide Federal assistance for individual lines of insurance, rather 
than just covering a company's losses in the event of a terrorist 
attack.
  This bill even goes so far as to include a group life insurance 
component, a sector of the insurance marketplace that has shown no sign 
of failure.
  Allowing this type of line-by-line coverage pushes the government 
into competitive, private insurance markets where it does not belong. A 
system of this nature will inevitably expose taxpayers to more risk 
sooner in the process, while at the same time allowing insurance 
companies to obtain government assistance before it may be necessary.
  Further, this bill continues to maintain a very low trigger for when 
the government would step in. While $50 million is higher than the 
current trigger level--set shortly after September 11th--the Department 
of Treasury had requested a number closer to $500 million. For a 
program that was designed to be triggered for catastrophic events only, 
this higher threshold is perfectly applicable.
  While the bill before us is only a two-year extension, it allows for 
a third year without Congressional approval. I am hard pressed to 
believe that this will be the final extension proposed.
  The Federal Government consists of thousands and thousands of Federal 
programs created by Congress. Many of these, I am convinced, were 
started with the intention that they would be temporary. To quote 
President Reagan, ``No government ever voluntarily reduces itself in 
size. Government programs, once launched, never disappear. Actually, a 
government bureau is the nearest thing to eternal life we'll ever see 
on this earth.''
  At some point, after some reasonable transition, either the market 
demands terrorism reinsurance or it does not. Our opinion should not be 
the relevant one. The relevant opinion is that of the market.
  If the market is not interested in terrorism reinsurance, Congress 
should not force the matter. If the market does demand this product, we 
should not assume that the Federal Government needs to be a permanent 
fixture.
  Modifying or eliminating regulations, reducing corporate income tax 
rates, and preventing the abuse of our legal system are all important 
factors that, if addressed, would free up massive amounts of capital 
for insurers and re-insurers.
  This additional capital would help to increase the supply of 
terrorism insurance, leading to a reduction in premium rates, and 
minimizing the need for a Federal backstop program or Federal 
involvement at all.
  Unfortunately, until we rid the world of the terrorists who seek to 
destroy us, terrorism insurance will continue to be a fact of life for 
businesses in this country. Until then, I have faith in our markets and 
their ability to respond accordingly to the challenges posed by 
domestic and international events.
  Regrettably, I cannot support this legislation but I plan to 
reluctantly support it.

                          ____________________