House backs TRIA version broader than one favored by Senate, White House

In the aftermath of the 9/11 attacks, Congress passed a sweeping insurance measure — Terrorism Risk Insurance Act (TRIA) — which made the government responsible for meeting terrorist-related loss claims above a certain dollar amount. There have been growing debates since then about whether or not there was a need for the government to step into the insurance market, with many claiming the the private sector could meet the needs of policies to cover losses from terrorist acts and natural disasters. Two days ago the U.S. House of Representatives voted to approve a slimmed-down version of TRIA. Reuter’s Kevin Drawbaugh reports that
the house bill is still more ambitious than an even narrower version favored by the Senate and the White House, with the result that the House vote did little to clarify the outlook for the TRIA program. The controversial TRIA is set to expire on 31 December if not renewed by the government, but New York and other big-city lawmakers view it as vital to urban property markets, while critics call it an unneeded subsidy to private insurers. The Senate has signaled clearly it will not accept the House bill and the White House has threatened to veto it. As it is, only seventeen days remain before TRIA expires and further Capitol Hill deliberations remain, making insurers and real estate interests anxious as they move into year-end renewal discussions on commercial insurance policies.

The Senate passed a bill last month which would extend TRIA for seven years, widen it to cover attacks of domestic origin as well as foreign origin, and make few other changes. The latest House bill concurs with the Senate’s, but would widen TRIA to take in group life insurance, lower the damages trigger level at which TRIA funds could be tapped, and includes a “reset” provision that would ease TRIA fund access thresholds for insurers in areas already hit by terrorist attack.