The failure of the last Congress to renew the Terrorism Risk Insurance Act may be remedied this month, starting with the introduction of a bipartisan bill to reinstate the federal program and provide retroactive coverage dating back to its expiration December 31.
House Financial Services Committee Chairman Jeb Hensarling promised a vote on the bill this week, saying he anticipates “yet another overwhelmingly bipartisan vote for [the] legislation.”
The previous attempt to pass TRIA reauthorization was stymied last month due to Sen. Tom Coburn’s opposition to a provision establishing NARAB, a national licensing board for producers. Coburn has since retired, and the NARAB provision remains intact in the current version of the bill without allowances for states to “opt out” of the program.
The GOP-dominated makeup of the new Congress is not expected to significantly alter parameters of the reauthorization, said AAMGA Executive Director Bernd Heinze, who has been working alongside several other industry groups to ensure a swift renewal of TRIA.
“The bill filed seems fairly straightforward,” Heinze told
Insurance Business America. “The only question we have right now is whether [Senate Banking Committee Chairman] Shelby is going to want to give the new senators a hearing on the bill, which may delay things in the Senate.”
The prospective renewal would extend TRIA another six years, raise the trigger for federal involvement in claims handling from $100 million to $200 million and gradually raise co-pay from 15% to 20%. It would also amend the program’s end date from Dec. 31, 2014 to Dec. 31, 2020.
Industry supporters of the renewal have argued that failure to reauthorize may result in unaffordable terrorism coverage as well as rises in workers’ compensation rates for at-risk cities. Other industries, including real estate, are also predicting severe fallout from discontinuation of the program.
Groups like the National Association of Professional Insurance Agents (PIA) expressed “shock and dismay” at TRIA’s expiration last month, and are currently lobbying Congress members for a hasty reinstatement.
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