The U.S. Senate overwhelmingly approved a bipartisan bill that would renew the Terrorism Risk Insurance Act, even as the House struggles to schedule a floor vote for its version before the August recess.
Bill number S. 2244 passed by a vote of 93-4, the American Insurance Association noted in a release celebrating the Senate vote on the pivotal property/casualty industry legislation. The National Association of Mutual Insurance Companies and the Coalition to Insure Against Terrorism issued similar statements praising the Senate for its TRIA renewal vote and throwing their support behind the Senate’s ideas for extending the law.
The bill, known as the Terrorism Risk Insurance Program Reauthorization Act of 2014, advanced out of the Senate Banking Committee on June 3 by a vote of 22-0 with a few amendments.
TRIA was first approved in the wake of 9/11 as a way to provide federal reinsurance coverage after a terrorist attack. Congress has renewed it twice since, in 2005 and 2007, but Senate and House members remain in conflict about TRIA renewal this time around. The current version of the law expires on Dec. 31.
The Senate’s version would reauthorize TRIA for seven years and boost co-payments from 15 percent to 20 percent in order to lessen the cost for the U.S. government. This would be phased in over five years, an AIA spokesperson said. As well, the bill would boost TRIA’s mandatory recoupment mechanism by $2 billion per year over five years (a $10 billion increase) to $37.5 billion.
There’s still a long way to go before TRIA renewal, and the Senate version would have to be reconciled with the House’s bill before lawmakers are able to actually extend the program. In June, the Republican House Financial Services Committee voted 32-27 (a party line split) for a different version of TRIA renewal, H.R. 4871. This bill would extent the program for five additional years. It would also enact a number of changes, such as boosting the program trigger over time from $100 million to $500 million. The House bill would also extend the co-payment from 15 percent to 20 percent for “conventional” terrorism losses.
According to the AIA, the House bill is designed to keep the program trigger and co-payment at current levels for nuclear, biological, chemical and radiological terrorism losses.
AIA President and CEO Leigh Ann Pusey said in a statement that the Senate passage of its bill was “a significant step forward toward the program’s renewal” and that it achieves the goal of protecting “policyholders and taxpayers while ensuring the continued widespread availability of property/casualty insurance for terrorism risks.”