Ground Swell For A TRIA Extender Now

By Arthur D. Postal and Matt Brady Washington Bureau

NU Online News Service, Sept. 23, 4:10 p.m. EDT,Washington?Momentum continues to grow in Congress forpassage this year of legislation extending for two years theTerrorism Risk Insurance Act.[@@]

Action on such legislation is scheduled Wednesday before thefull House Financial Services Committee, and broad bipartisansupport is expected. The plan is then to move the bill through theHouse within the subsequent 10 days, according to Julie Gackenbach,assistant vice president, government relations, for the PropertyCasualty Insurers Association of America.

Rep. Mike Oxley, R-Ohio, chairman of the panel, has indicatedthat enactment of the bill has become a priority.

"Rep. Oxley, by moving this quickly through the normal committeeprocess and on to the floor, is retaining all of his legislationoptions for moving the bill this year," Ms. Gackenbach said.

Equally important, strong support for the legislation wasevident for the bill during the Senate Banking Committee hearing oninsurance regulation yesterday. All senators except chairman Sen.Richard Shelby, R-Ala., voiced support for the bill; Sen. Shelbyhad indicated earlier in the week that he wanted to hold off actionuntil next year because he wanted to hold a hearing on theissue.

Now it appears that the chairman will go along with passage thisyear after members of the panel gave a near-unanimous show ofhands, when they were asked by Sen. Charles Schumer, D-N.Y., toindicate their support for the bill.

Only J. Robert Hunter, insurance director of the ConsumerFederation of America, raised his hand when Sen. Schumer askedduring the hearing who opposed extending TRIA.

"Senators get it that this needs to be done and it needs to bedone expeditiously," Ms. Gackenbach said. "Our preference is tomove this bill as soon as possible. We're moving into some prettysignificant dates for people seeking to negotiate new contracts. Sothe earlier we can complete this action, the better it is forpolicyholders and insurers."

The bill to be taken up by the House committee was introduced inJuly by Reps. Richard Baker, R-La., chairman of the Capital MarketsSubcommittee, and Pete Sessions, R-Texas. It would extend thecurrent TRIA legislation for two years, retaining the 15 percentindividual company retention level scheduled to go into effect Jan.1, 2005 through 2006, and increase that to 20 percent in 2007.

Similar legislation has been introduced in the Senate by Sens.Robert Bennett, R-Utah, and Chris Dodd. The only concern with thebill is that it provides "no soft landing," and there will be ahard cutoff date of Dec. 31, 2007.

The hard cutoff means insurers extending contracts during 2007would retain responsibility for paying claims during the period in2008 until the contracts expire even though the federal backstopwould no longer be available?the same problem the industry isconcerned with now. "It doesn't solve that problem," Ms. Gackenbachsaid.