House Panel Passes TRIA Extension

By Arthur D. Postal and Matt Brady, Washington Bureau

NU Online News Service, Sept. 29, 2:34 p.m. EDT,Washington?Legislation extending the Terrorism RiskInsurance Act for two years, until Dec. 31, 2007, sailed throughthe House Financial Services Committee today.[@@]

The legislation was reported out on a voice vote after twoDemocrats withdrew an amendment that would have provided a softlanding?that is, extended the legislation into 2008 for allone-year contracts entered into in 2007.

Because the legislation?which includes group life insurance forthe first time?contained language that in principle is beingsupported by the Bush administration as well as conservatives inthe House, it will likely face an easy path to enactment beforeCongress adjourns by either Oct. 8 or Oct. 15. It is likely to bepassed in some form by the full House by next Thursday.

Similar legislation is pending in the Senate.

Rep. Barney Frank, D-Mass., justified quick action on theextension by saying, "The argument for moving now is that we'retalking about people planning the construction of commercial officebuildings, and that's not something that can be done at the lastminute."

The legislation extends TRIA until Dec. 31, 2007. It wasintroduced in July by Reps. Richard Baker, R-La., chairman of theCapital Markets Subcommittee of the panel, and Pete Sessions,R-Texas. It would extend the current TRIA legislation for twoyears, retaining the 15 percent individual company retention levelscheduled to go into effect Jan. 1, 2005 through 2006, and increasethat to 20 percent for 2007.

Some industry lobbyists and congressional staffers believe thatto ease its path through Congress as it races to adjourn, it mightbe attached to legislation implementing the recommendationsproposed by the 9/11 Commission. The committee took up thatlegislation after acting on the measures extending TRIA andclarifying that state regulators have oversight over sales ofinsurance on military bases, as well as other provisions.

Industry representatives voiced gratitude to the committee andits leadership for prompt action on the extension.

"We are extremely pleased that the House Financial ServicesCommittee has taken action on this important bill, which is vitalto the insurance industry's ability to cover catastrophic lossesrelated to terrorism and also to preserving confidence in themarket," said Robert A. Rusbuldt, chief executive officer of theIndependent Insurance Agents and Brokers of America.

"Passage of this bill is crucial to providing certainty in theinsurance marketplace," added Charles Symington Jr., senior vicepresident of federal government affairs for the IIABA. He calledthe measure "a must for many of the business clients of independentagents and brokers."

"The Big ?I' supports this legislation strongly and willcontinue to work with its industry partners and commercialpolicyholders to push for its speedy enactment," said Mr.Symington.

Mr. Symington and the Big "I" are also strongly urging theSenate to move quickly to pass S. 2764, a similar bill pending inthe Senate, and praised Sens. Chris Dodd, D-Conn., and Bob Bennett,R-Utah, for working together to introduce the bipartisanlegislation.

The Property Casualty Insurers Association of America also"commended" the panel for its action. Carl Parks, PCI senior vicepresident, government relations, added, "PCI and its membercompanies will continue the effort to move a TRIA extension throughthe Senate and House this year. This is still a great deal of workto do, but the case for a TRIA extension is clear."

Its easy path through the House is surprising, given that oddsfor passage of an extension this year was regarded as 10 percent bymost industry lobbyists as late as a month ago.

Now, "this legislation has a very real chance of at becoming lawthis year," Mr. Parks said.

After the committee voted, the National Association ofProfessional Insurance Agents put out a statement saying they havelaunched a "nationwide grassroots action campaign" to urge Congressto pass the bill.

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