(Archived Content)
FROM THE OFFICE OF PUBLIC AFFAIRS
JS-1946
Designated insurers and policyholders will soon receive questionnaires that are a part of the second wave of a survey Treasury has undertaken to study the terrorism insurance market and the effectiveness of the Terrorism Risk Insurance Act of 2002 (TRIA).
TRIA, which established a temporary federal backstop for certain insurance losses in the event of an attack by foreign terrorists, requires Treasury to report to Congress by June 30, 2005, on specific issues associated with the Act and its purposes. Treasury is required to assess the effectiveness of the program and the capacity of the industry to offer terrorism coverage after the termination of the program, as well as the availability and affordability of such insurance.
As a major component of providing the Department with a broad view of market conditions and dynamics, Treasury is conducting a comprehensive, multi-wave survey of policyholders, insurers, and reinsurers. The survey is designed to collect quantitative, unbiased, and statistically reliable information that will accurately reflect conditions in the marketplace over time. Survey participants are selected according to statistical procedures designed to achieve a nationally representative sample.
Starting tomorrow, designated insurers and policyholders will begin receiving the second wave of the survey. The survey is being conducted in three phases in order to ensure that the report to Congress reflects developments over time as the market evolves and as the legislated and automatic changes in the coverage of the Terror Risk Insurance Program (TRIP) take place. The first wave of the survey collected data from 2002, before TRIP was established, and 2003. The current wave will inquire about conditions in 2004. The third wave of surveys will go out to insurers and policyholders in early 2005 to assess the market conditions at that time. Some responses to the third survey wave are expected to reflect policies that extend beyond the scheduled expiration of the program.
While we recognize and appreciate that it is a significant undertaking for many companies, Treasury urges all selected organizations to participate in this survey. This issue is important for our national economy as well as for the insurance industry and its policyholders. It is crucial that we assess the program with the benefit of the best information possible, said Assistant Secretary for Economic Policy Mark J. Warshawsky.
The Confidential Information Protection and Statistical Efficiency Act of 2002 provides legal safeguards against disclosure of the identities of, or information from, survey respondents, and Treasury has taken great care to ensure that survey responses are protected from disclosure. The survey is being administered by Westat, an organization with experience in the collection and analysis of confidential data. The data provided to Treasury will not include company names or other identifying information; therefore Treasury will not be able to link survey responses with the identity of the company. The data will be used for exclusively statistical purposes.
Survey participants will be contacted by Westat and may return their information by mail, complete the surveys online at www.TRIAsurvey.org or relay their information over the phone by calling 888-891-6883. Treasury urges participants to fill out as much of the questionnaire as they can and return it by December 8, 2004. We strongly encourage all recipients of the survey to participate, even if, for one reason or another, the recipient did not participate in the first wave of the survey.
A variety of privately-funded studies have been published in recent months. None present the depth of information gathered over a period of time that is planned with the Treasury study. The multiple stages of the Treasury study are essential in order to measure changes taking place while the existing program has been in operation. This deeper and broader approach should increase the ability, for example, to measure market responses to government's changing backstop roles, changing customer attitudes toward terrorism risk, and the impact of the program on private sector efforts to mitigate terrorist risk, among other developments. Because of the importance of these issues in formulating policy, we believe that it is premature to draw conclusions about the need for additional legislation before the Department has concluded its comprehensive assessment, said Assistant Secretary for Financial Institutions, Wayne Abernathy.
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