WASHINGTON—The most likely path to enactment of legislation reauthorizing a federal backstop for terrorism risk insurance that insurers can live with is House de facto acceptance of the preferable Senate bill, through inclusion of it in a must-pass congressional resolution (CR) needed to keep the government running through the transition to a new Congress.
"I am not sure there will be negotiations [between conflicting Senate and House versions of the Terrorism Risk Insurance Act (TRIA) reauthorization) bill," said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies. "This maintains the $100 million trigger, but also includes significant reforms to the program."
"We expect TRIA to be reauthorized before Congress adjourns sine die in December," added Nat Wienecke, senior vice president, federal government relations at the Property Casualty Insurers Association of America (PCI). "It is possible that TRIA is attached to a CR if they run out of time, though there are many that would like to see it go through regular order."
Grande, interviewed at last week's annual NAMIC convention, said that Congress will return to work after the mid-term elections Nov. 12, but will spend that first week or two organizing themselves as political parties.
He said they will then go home for Thanksgiving. "When they return from Thanksgiving, they will only have 8-9 days (to negotiate) and I haven't seen anything that will give me any confidence that the House and Senate will do any negotiating between a Senate bill that had 93 votes and a House bill that can't get enough support to get on the House floor," Grande said.
Wienecke said the lame duck session "is going to be a busy time," adding, "You could look back for many years and not see Congress dealing with three insurance-specific bills in final days of the legislative session."
He said PCI "remains optimistic" that the House and Senate will work out a plan to get TRIA, legislation creating the National Association of Registered Agents and Brokers (NARAB) and a bill clarifying that the Federal Reserve can oversee insurers using Statutory Accounting Principles (SAP) to the president's desk for signature.
"It's a matter of parliamentary mechanics and time," Wienecke said.
The Senate bill is S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014. It passed the Senate in July by a 93-4 vote.
The Senate raised the insurer co-pay from the current 15 percent to 20 percent and the mandatory recoupment from $27.5 billion to $37.5 billion [over five years]. But, it retains the current $100 million trigger for federal involvement in a terrorism event.
The House bill H.R. 4871, the TRIA Reform Act of 2014. That bill calls for gradually increasing the program trigger for all non-nuclear, biological, radiological, and/or chemical (NBCR) events, from $100 million to $500 million by 2019, which industry officials say effectively phases out the program for non-NBCR events.
It passed the House Financial Services Committee in July on a party-line 32-27 vote, but a head count in September by the House Republican leadership failed to produce enough Republican support to get the bill through the House without Democratic support.
And Democrats signaled they would not support the radical bill forced through the House FSC with no Democratic support.
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