BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AJR 34|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AJR 34
Author: Cooley (D)
Amended: As introduced
Vote: 21
ASSEMBLY FLOOR : 76-0, 4/7/14 (Consent) - See last page for vote
SUBJECT : Terrorism risk insurance
SOURCE : American Insurance Association
DIGEST : This resolution urges the President and Congress of
the United States to take action as soon as possible to extend
the Terrorism Risk Insurance Program Reauthorization Act of 2007
to protect the California and national economies.
ANALYSIS : This resolution makes the following legislative
findings:
1.Insurance helps protect the California economy from the
adverse effects of the risks inherent in economic growth and
development while also providing the resources necessary to
rebuild physical and economic infrastructure, offers
indemnification for business disruption, and provides coverage
for medical and liability costs from injuries and loss of life
in the event of catastrophic losses to persons or property.
2.The terrorist attacks of September 11, 2001, resulted in
claims paid by insurers to their policyholders eventually
totaling some $32.5 billion, making this the second most
CONTINUED
AJR 34
Page
2
costly insurance event in U.S. history.
3.The sheer enormity of the loss, combined with the possibility
of future attacks, produced financial shockwaves that shook
insurance markets causing insurers and reinsurers to exclude
coverage arising from acts of terrorism from virtually all
commercial property and liability policies, and the lack of
terrorism insurance contributed to a paralysis in the state
and national economies, especially in construction, tourism,
business travel, and real estate finance.
4.The U.S. Congress originally passed the Terrorism Risk
Insurance Act of 2002 (TRIA) (Public Law 107-297), in which
the federal government partnered with commercial
property-casualty insurers on a shared loss program that
provided the certainty and stability needed to reestablish a
functional private market for terrorism risk insurance, and
reauthorized this arrangement through the Terrorism Risk
Extension Act of 2005 (Public Law 109-144) and the Terrorism
Risk Insurance Program Reauthorization Act of 2007 (TRIPRA)
(Public Law 110-160).
5.Without question, TRIPRA and its predecessors are the
principal reason for the continued stability in the insurance
and reinsurance market for terrorism insurance to the benefit
of California's economy.
6.Absent an extension by Congress, TRIPRA will expire on
December 31, 2014.
7.Without the encouragement of private market participation
established by TRIPRA, a limited availability of insurance
against terrorism would have a severe adverse effect on
California's economy as financiers might be reluctant to lend,
businesses might be reluctant to invest, and commercial
consumers might be unable to afford insurance in the state's
major population centers.
This resolution urges the President and the Congress of the U.S.
to support a long-term extension of TRIPRA, and to take action
as soon as possible to extend TRIPRA.
FISCAL EFFECT : Fiscal Com.: No
CONTINUED
AJR 34
Page
3
SUPPORT : (Verified 4/9/14)
American Insurance Association (source)
Association of California Insurance Companies
Building Owners and Managers Association of California
California Business Properties Association
California Chamber of Commerce
California Financial Services Association
California Hotel and Lodging Association
Commercial Real Estate Development Association (NAIOP of
California)
CSAC Excess Insurance Authority
International Council of Shopping Centers
Liberty Mutual Insurance Company
National Association of Mutual Insurance Companies
Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California
The Risk Management Society
ASSEMBLY FLOOR : 76-0, 4/7/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Cooley, Dababneh,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Maienschein,
Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, V. Manuel P�rez,
Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Bloom, Conway, Lowenthal, Vacancy
AL:k 4/9/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED
AJR 34
Page
4
CONTINUED