Terrorism insuranceImpasse in Congress over terrorism insurance (TRIA) renewal
The Terrorism Risk Insurance Act(TRIA) is expected to expire by 31 December unless Congress renews the legislation or places a temporary extension. The legislation, initially established in November 2002 as a federal backstop to protect insurers in the event an act of terrorism results in losses above $100 million, has been extended and reauthorized. The insurance industry supports the reauthorization approved by the Senate, and opposes a short-term extension. Some insurance companies have noted on their contracts that policyholders could lose terrorism coverage if TRIA is not renewed.
House once again locked over an issue // Source: presstv.ir
The Terrorism Risk Insurance Act (TRIA) is expected to expire by 31 December unless Congress renews the legislation or places a temporary extension. The legislation, initially established in November 2002 as a federal backstop to protect insurers in the event an act of terrorism results in losses above $100 million, has been extended and reauthorized. The current fight to renew TRIA centers on negotiations between House Financial Services chairman Representative Jeb Hensarling (R-Texas) and Senator Chuck Schumer (D-New York). The Senate, led by Democrats, passed a 7-year extension of TRIA earlier this year, but several House Republicans want to reduce the federal backstop and offset the $3.5 billion cost of the program via other spending cuts. Democrats oppose that idea. “He’s been completely unreasonable in negotiations over flood insurance, extending the Ex-Im Bank and now there’s TRIA,” a Democratic source close to the negotiations said of Hensarling. “It’s completely impossible to negotiate with somebody who brings ideology instead of a proposal that can pass Congress.”
Politico reports that Schumer and Hensarling met last week to negotiate a deal, but both were unwilling to compromise on reauthorization requirements. Hensarling allegedly offered to extend reauthorization of TRIA from five years, as proposed by the House, to six years, and to reduce the threshold for when government insurance is activated following a terrorist attack to $250 million from $500 million. Schumer was willing to accept a 6-year extension rather than seven, and put the threshold at $150 million rather than $100 million, as proposed by the Senate-passed bill.
Negotiations collapsed when Hensarling insisted that spending cuts must offset the $3.5 billion cost of TRIA.
Should the parties fail to reach an agreement this year, Hensarling is threatening to settle for a short-term extension, then negotiate with a Republican-led Senate in the next Congress. Earlier this year, Representative Paul Ryan (R-Wisconsin), talking at the Financial Services Roundtable, predicted that TRIA would not pass the House until reforms were made to the bill, but a short-term reauthorization bill may be an option. “The way I see this coming down is, it’s going to get extended,” Ryan said. “The question is: Do you do reforms now and negotiate, or do you just do a short-term extension into next year and then do negotiations?”
The insurance industry supports the reauthorization approved by the Senate, and opposes a short-term extension. Some insurance companies have noted on their contracts that policyholders could lose terrorism coverage if TRIA is not renewed.
