Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee, which unanimously reported out the core bill June 3, said experts and stakeholders testified at several banking committee hearings that there remains a “clear and longstanding need for the kind of government backstop that the Terrorism Risk Insurance Act TRIA provides.

“We also learned that the private insurance market for terrorism risk exists because of TRIA, not in spite of it,” he said. “The long-term seven-year extension this bipartisan bill provides will promote national security, economic growth and market certainty.”

He added that while many members in this chamber “would be fine with extending TRIA in its current form,” this “tough compromise” has two additional changes that will further protect taxpayers.

He cited raising the insurer co-pay from 15% to 20% and the mandatory recoupment from $27.5 billion to $37.5 billion [over five years].

Johnson noted, however, that, “we were careful” in reaching this compromise that the Senate did not raise the trigger, which would drive smaller insurers out of the market and reduce affordability of coverage for business nationwide, that “this bipartisan bill does not pick what modes of terrorism attacks would get preferential treatment over the other forms of attacks.”

The Senate dealt with three amendments. One, passed by voice vote, was on a bill establishing the National Association of Registered Agents and Brokers (NARAB).

The Senate rejected an amendment by Sen. Tom Coburn, R-Okla., which would allow the Treasury secretary to postpone recoupment of funds allocated by the government to pay for a terrorism event under the law for up to 10 years. It was disapproved 47-49 on a budgetary point of order.

Coburn said he proposed the amendment because the way the bill reads now, the Treasury secretary is most likely to immediately ask Congress to forgive recoupment because it will be too costly, and Congress is likely to support him.

Sen. Charles Schumer, D-N.Y., urged senators to reject the amendment because it would have a huge budget cost no one wants to deal with, and would launch partisan bickering.

Another amendment sponsored by Sen. Jeff Flake, R-Ariz., mandates creation of an advisory committee that would recommend further ways to reduce the government's role in terrorism risk insurance. It was passed 97-0.

Industry officials are privately warning final action on the bill may not come until the fall, or perhaps as late as December.

Under the Senate bill, the amount insurers would pay under a covered event, before federal recoupment is no longer mandatory and becomes discretionary, would rise by $2 billion annually from the current $27.5 billion, until it reaches $37.5 billion in five years. Another change would reduce the total amount the federal government will cover from the current 85% to 80% over the same five-year period.