A Thursday vote has been scheduled on the House Financial Services Committee's version of legislation reauthorizing the Terrorism Risk Insurance Act (TRIA).
The current version sunsets Dec. 31, and industry officials lauded the decision of the House FSC leadership to move the bill through the committee and hopefully through the House floor before the August recess.
They are, however, hopeful that the Senate version of the legislation, approved June 3 unanimously by the Senate Banking Committee, will ultimately be the template for final legislation enacted by Congress.
Leigh Ann Pusey, president and CEO of the American Insurance Association says the House bill creates a bifurcated approach for nuclear, biological, radiological and chemical (NBCR) attacks vs. conventional attacks and “falsely assumes that the insurance market operates based on the same distinctions.”
She adds, “We are also concerned about the steep increase in the program trigger and co-share, which could also lead to a reduction in capacity.”
Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, says, “With just months until the TRIA program expires, any sign of progress is a welcome one.”
Nat Wienecke, senior vice president, federal government relations at the Property Casualty Insurers Association of America (PCI), warned that, “Understanding that legislating is the art of the possible, we call on Congress to ensure that any increases to the trigger and co-share not be so high or so steep that they inhibit the availability and affordability of terrorism insurance.”
Frank Nutter, president of the Reinsurance Association of America, appeared to support the House bill. Nutter says the “public-private partnership will ensure that terrorism coverage is provided, especially for NBCR risks.”
He adds, “We are particularly pleased the Financial Services Committee recognizes the importance of moving forward with TRIA reauthorization.”
NARAB and TRIA
At the same time, the Council of Insurance Agents and Brokers disclosed that it will seek to have separate legislation re-creating the National Association of Registered Agents and Brokers attached at some point to the TRIA reauthorization legislation.
“We're hopeful that this legislation—which has been separately approved by both the House and the Senate—can be ultimately incorporated into the TRIA legislation,” says Ken A. Crerar, CIAB president and CEO.
The House bill would extend the current program for five years; the Senate version, S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014, would extend it for seven years. But, it did increase industry co-shares by one-third under a 5-year phase-in period.
The House bill is H.R. 4871, the TRIA Reform Act of 2014.
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