Roundtable Chairman-Elect Bill Rudin called on the U.S. House of Representatives to renew the Terrorism Risk Insurance Act (TRIA), a federal program that provides a financial backstop for building insurers. Should Congress fail to extend the program, he said, it will lead to a slowdown in the economy and investments.
- In the House, Housing and Insurance Subcommittee Chairman Randy Neugebauer (R-TX) introduced the TRIA Reform Act of 2014 (H.R.4871) which was marked-up and reported out of the House Financial Services Committee by a largely party-line vote of 32-27 on 20 June. The bill would extend the federal terrorism insurance program for five years, increase the insurer co-pay to 20 percent, and create a new program bifurcation for nuclear, biological, chemical, or radiological (NBCR) type of attacks. The House legislation also increases the program’s trigger from $100 million to $500 million over five years. The proposal would also provide an “opt-out” for small insurers. The Congressional Budget Office (CBO) estimates that, “the bill would increase budget deficits by about $500 million over the 2015-2024 period.” House Leadership has not brought the bill to the floor because it lacks the votes to pass in its current form.
- A bipartisan extension bill — the Terrorism Risk Insurance Program Reauthorization Act of 2014 (S.2244) — was passed in the Senate with an overwhelming 93-4 vote on 17 July. The proposal would extend the program for seven years, increase insurer co-pays from 15 percent to 20 percent for losses above the $30 billion threshold, while increasing the recoupment amount by $10 billion, to $37.5 billion. The CBO estimates that, “the bill would reduce budget deficits by $460 billion over the 2015-2024 period.”
With Congress set to reconvene after the mid-term elections on November 12, Republicans have yet to resolve internal disagreements and pass a House Financial Services Committee-approved bill. It is not clear what the next steps are for Financial Services Committee Chairman Jeb Hensarling (R-TX) in terms of adapting the House bill to something that will garner adequate votes to pass the House. Republicans have been at odds over how much to increase insurers’ potential financial exposure to terrorism risks. Nonetheless, there is broad bipartisan support in the House for an extension should an acceptable bill be brought to the floor.