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Let's scrap the Terrorism Risk Insurance Extension Act. Scrap it now, posthaste. Send TRIEA to one of those shredders in the Washington, D.C., paper mill.

Now, before you dismiss the previous sentence as the gassy pronouncements of another media windbag, consider this: I'm asking you to bid good riddance to TRIEA not on my say-so, but on the advice of insurance buyers.

But they've spoken, all right, with their wallets. Has anyone you know bought into this rip-off? Has anyone with an ounce of common sense shelled out an extra $1 million or $2 million for terrorism risk on top of their regular property/casualty premium?

I'm not talking about the brand-name brokers, "working" in gleaming offices in high-risk money centers like New York, Chicago and Los Angeles. I'm not talking about the big carriers and their Fortune 500 clients who can afford hired guns on Capitol Hill.

I'm not even talking about heavy-hitters like Jay Scheid, director of risk management for Tribune Co., which raked in $5.7 billion in sales in 2004, nor Laurie Brooks, chief risk officer and vice president of risk management for Public Service Enterprise Group, and I'm not talking about the erudite and cosmopolitan Samira Barakat, senior vice president of risk and underwriting for GE's insurance unit.

I am talking about men like John J. Herson, vice president of taxes for Neenah Paper Inc. He's not only passed on buying terrorism risk insurance, but has done so on the advice of his broker. Why, indeed, would buy-siders like Herson, who works in the company's Alpharetta, Ga., office, have a need for such coverage? It's not like he's about to get hit by a flying airplane or a bomb placed roadside on Georgia's Route 19.

Much has been made of chemical, biological, radiological and nuclear threats, and nothing ruffles the feathers of industry front men like Willis CEO Joseph Plumeri as the mention of CBRN. Squawking away in Monte Carlo during the Rendez-Vous de Septembre, he called for nothing less than a new economic order in the form of a public-private partnership between the insurance industry and the federal government. He spoke as if the very survival of the industry depended on it.

Hardly. The industry's doing just fine. It was alive and well before Sept. 11, 2001, and will remain so, long after Sept. 11, 2101.

In truth, it's not that easy to wreak havoc on the United States using chemical and biological weapons, and it's especially difficult if the federal bureaucrats in charge of our security do their jobs correctly. The anthrax attacks in the wake of the sucker punches pulled on the United States on Sept. 11, dastardly and opportunistic as they were, disrupted little more than a U.S. post office. Chemical attacks are nearly impossible to execute on a large scale. Nerve gas, used by Saddam Hussein to annihilate Kurdish villages, horrific as it was, is hardly a threat to the survival of our species.

Want to talk dirty--dirty bombs, that is? Producing a nuclear weapon, much less delivering it on the intended target, is not easy despite what you may have seen on television's "24." How do you plan to squeeze "Fat Man" through New York's Lincoln Tunnel without anyone noticing? Should you or your clients have the misfortune to meet your maker in the billows of a mushroom cloud, then, quite frankly, you, your business and your families are better off dead.

Which brings us back to why buyers are stuck paying premiums for a risk that wallows on the level of being a nuisance rather than a matter of national security? Terrorism is a risk we can all live with. If companies want to run their affairs from the 70th floor of Chicago's Sears Tower, then let them do so. But surely you can't ask buyers in Montana, Arkansas and West Virginia for subsidies to pay for losses incurred by companies in New York, Chicago and Washington, D.C.--no thanks. And that's why the premium rip-off known as the Terrorism Risk Insurance Act and its extension deserves to die.

CYRIL TUOHY is managing editor of Risk & Insurance®.

February 1, 2006

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