It's just that since his comments at the 2002 annual meeting that the odds of a nuclear attack on Manhattan were "inevitable" by 2052, Buffett has carried water for the whole industry.
Page 9 of the BRK 2002 Annual Report has some more of his thoughts. It's all about the money.
Because the "temporary" 'Terrorism Risk Insurance Act' backstop is in place, the insurers and reinsurers are able to sell product that has brought in at least $40 Billion in profits in the last thirteen years.
(premiums paid with no claims pretty much drops straight to the profit line)
I understand the New York Congressional delegation, from Schumer down to the newest Rep. being all for the reauthorization, it's a pretty sweet deal if you can get the rest of the country to subsidize your real estate market but be forthright and say you're in favor of corporate welfare.
One last point. A nuke in NYC causes at least a $Trillion in damage and I'm guessing the insurers haven't squirreled-away that $40 Bil so they'll be able to meet their obligations when the time comes or as capacity to do more risk-management-good-works.
What I'm saying is, just be honest: the government will end up paying anyway so there's no reason to hand out $3 billion a year while we wait for the "inevitable". And at his core, Warren is an insurance salesman from Omaha.
From Property Casualty 360°:
House TRIA bill back to square one as slimmed down version fails to gain support
It’s back to the drawing board for House Republicans on legislation reauthorizing a federal backstop for terrorism risk insurance.Some background from The Guardian June 19, 2014:
Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, disclosed last night that House Republicans failed to gain enough support to push through a bill that would effectively phase out a federal backstop for terrorism risk insurance after five years except for nuclear, biological, chemical and radiation (NBCR) risks.
In the wake of the head count, Waters called on members of both parties “to work together to achieve consensus on the renewal of the Terrorism Risk Insurance Act (TRIA).”
The fact that Republicans lack the votes to pass the slimmed-down bill through the House comes against the background of a scheduled Senate vote today on a bill that makes only modest changes to the current TRIA legislation.
“Tomorrow, the U.S. Senate is likely to pass bipartisan legislation to renew TRIA without delay,’ Waters says in her statement.
“Until the House does the same, the uncertainty and instability that for months has plagued our largest venues, businesses and employers will continue unabated,” she says.
With all 27 House FSC Democrats voting “no,” the FSC Republican leadership pushed the bill through the committee June 20, with 32 votes.
Rep. Peter King, R-N.Y., had made it clear for weeks that urban, moderate Republicans would ultimately not support the legislation.
In a comment to The New York Times Tuesday, King said he had support from up to 30 other Republicans to oppose the House bill as written, and he was apparently true to his word. King argues the House bill “is a solution in search of a problem. [The existing program] hasn't cost us one penny. It’s brought in billions of dollars in tax revenues from the rebuilding of New York and it’s still needed.”...MORE
Congress prepares to renew $40bn bill terrorism insurance law
The Terrorism Risk Insurance Act has never covered a single company from terrorism costs and has earned $40bn in revenue for insurance companies. But Congress is too afraid to end it
On Thursday, the House financial services committee debated whether to renew a law mandating a bailout of sorts for the insurance industry: a government backstop for insurance companies to provide terrorism insurance.Speaking of Cato, here's their Sept. 2013 position paper "The Terrorism Risk Insurance Act: Time to End the Corporate Welfare" (20 page PDF)
Even though this program has existed since 2002 and has never been used, by any US company, its path through Congress has always been frictionless.
Meet the screwed-up, scared congressional dynamic around 'Tria'.
The Terrorism Risk Insurance Act provides a government backstop to insurance companies in the event of a terrorist attack. Tria arrived in the wake of the September 11 attacks, when it arose as a way for the government to protect the insurance companies from taking huge losses that would put them out of business after a terrorist attack.
The rationale behind Tria is simple. Previously, there was no contract by which companies could protect themselves from terrorism costs. That was a disaster when the insured loss for 9-11 approached $40bn, with most of it paid by insurance companies and the firms who insure them, known as reinsurers.
The appeal is clear – to insurers, who have been raking in cash. Over 60% of all businesses have purchased government-subsidized terrorism insurance since 2002. The program has cost the government $1m a year – almost nothing – but has made an estimated $40bn in revenue for insurance companies, who have never paid a claim, or given a dime to the government for their reinsurance protection.
“This is largely a handout to the insurers and the insured industries,” said Mark Calabria, director of financial regulation studies at the libertarian Cato Institute....MORE
And here is Marsh (what happened to McClellan?) with the industry view: "2014 Terrorism Risk Insurance Report".
