Despite a significant difference in scope and approach, insurance industry lobbyists believe they can build on competing bills in the House and Senate to extend the Terrorism Risk Insurance Act before the federal backstop expires on Dec. 31.

Congress, on a two-week break, will resume work the week of Dec. 5, and hopes to finish its work for the year by Dec. 15.

The Senate Banking Committee reported its TRIA bill out by voice vote on Nov. 16, and the bill passed the Senate by unanimous consent. That same week, the House Financial Services Committee surprised everyone by sending to the full House a comprehensive piece of legislation extending TRIA by a resounding 64-3 bipartisan vote. The bill is on a fast track to pass the House soon after Congress returns.

One lobbyist said that many believed the House Financial Services Committee would not be able to write a bill that could be passed onto the House floor "because of the politics of the tort reform issue," citing "those conservatives who want to attach to it provisions that would ban punitive damages arising from a terrorism event."

However, the lobbyist added, Committee Chairman Michael Oxley, R-Ohio, and Richard Baker, R-La., who chairs the key Capital Markets Subcommittee, "put together a package that passed the committee by virtual unanimity, narrows the program's scope through higher triggers, silos and a pay-back mechanism, yet also sets the stage for the creation of an ultimate private-sector pooling mechanism."

"The relative ease with which they pushed through this package positions them well for, hopefully, a full resolution by the second week of December," the lobbyist added.

The Senate bill narrows the lines of business the government will cover and increases retention levels. The White House is making clear that it supports the simpler Senate bill.

"The administration strongly supports the bill's exclusion of additional lines of coverage and will strongly oppose any efforts to add lines of coverage, including group life insurance, or further expand the program," a White House statement read.

One lobbyist brushed aside concerns that a "take-it-or-leave-it" attitude by the Senate might doom the bill. Such talk developed because of fears "some conservatives want to create a political deadlock and let the program expire."

The "take-it-or-leave-it" concern surfaced, according to one lobbyist, because when Sen. Richard Shelby, R-Ala., Sen. Robert Bennett, R-Utah, and Sen. Dodd put their bill together, "the three agreed to oppose any changes. Plus, the Shelby/Dodd/Senate deal has White House backing, though no one believes there is any chance President Bush would exercise his first veto on this legislation."

However, Ken Crerar, president of the Council of Insurance Agents and Brokers, said that despite the differences, the two bills could be easily reconciled.

"Despite reports of wide gulfs between the bills, we think congressional leaders could get their staffs to negotiate out their differences in a day's time," he said. "Even though we are all concerned about quick action, we deeply believe regular order should prevail, and the two chambers should work together in the remaining days of Congress to get a bill that works."

Mr. Crerar added that, "We consider this a critical matter of domestic security, and we call on Congress to handle it as it would all other significant pieces of legislation and not try to shortcut the regular political process."

Finally, Mr. Crerar called upon the brokerage and policyholder communities to continue to pressure Congress for final action. "The developments this week have been encouraging, and we don't believe there are any reasons why a deal can't be achieved," he said. "No single issue should get in the way of a negotiated compromise. We're optimistic, but the drumbeat must continue, as final enactment is not assured."

All insurance industry trade groups lauded action by both the House and Senate. David Winston, senior vice president of the National Association of Mutual Insurance Companies, talked of the importance of reconciling both measures.

Small insurers would benefit from many provisions of the House bill, he said, but "NAMIC strongly supports the exclusion of farmowners multiperil insurance in the Senate-passed bill and will work to have this provision included in the conference report."

Ramani Ayer, chairman and chief executive officer of The Hartford, has spoken many times over the last 18 months on the importance of TRIA extension, both as CEO of The Hartford and also on behalf of the American Insurance Association. He noted the importance of both votes and singled out Sen. Chris Dodd, a Democrat representing his state, saying the Senate bill "would continue the successful public-private management of terrorism risk."

Mr. Ayer called the full Senate vote by unanimous consent an "important step to help make America safer and its economy stronger." He added that "we are also encouraged by the House Financial Services Committee's approval of a TRIA extension bill, and look forward to having legislation enacted by Congress before the end of this year."

"Despite reports of wide gulfs between the bills, we think congressional leaders could get their staffs to negotiate out their differences in a day's time."

Ken Crerar, President

Council of Insurance Agents and Brokers