The Terrorism Risk Insurance Act would be reauthorized in itspresent form but with much greater industry liability for fiveyears under legislation to be unveiled today by House FinancialServices Committee Republicans.

That represents a compromise from an earlier draft, whichproposed to extend the current program for three years, but remainsin contrast to legislation reauthorizing the program reported tothe Senate floor June 3.

The Senate bill extended the program in its current form forseven years, but did increase industry co-shares by one-third undera five-year phase-in period.

Under the House bill, dubbed the TRIA Reform Act of 2014 fromthe earlier Terrorism Risk Insurance Modernization Act or TRIM, nochanges would be made in the current program for 2015.

But it calls for gradually increasing the program trigger forall non-nuclear, biological, radiological, and/or chemical (NBCR)events, from $100 million to $500 million by 2019, effectivelyphasing out the program for non-NBCR events.

In releasing the proposal, the House FSC Republican leadershipsays, "The TRIA Reform Act strengthens vital taxpayer protectionand encourages more robust private-market participation withoutcurtailing the program's fundamental functions."

As in the earlier draft, it would reduce the federal co-payshare of insurers' losses for non-NBCR-covered events over thecourse of the reauthorization from 85% to 80%.

It also requires greater industry "skin in the game" throughtaxpayer repayment provisions by benchmarking the industry's lossretention level to the sum of its deductibles.

It also reduces taxpayer involvement by clarifying the terms ofthe mandatory recoupment mechanism, and increases the assessmentrate to compensate taxpayers for the value of their TRIAinvestments from 133% to 150%.

The legislation does address technical concerns raised by theindustry. For example, it establishes a fixed, 90-day timeline forcertification of acts of terrorism—with a preliminary certificationnotice after 15 days.

House FSC officials say they did that so that policyholders willnot be left wondering if their claims will be covered. It alsogives the Treasury secretary the flexibility to base certificationsolely on the nature of the terrorist act, foreign or domestic, byremoving the current $5 million threshold for event certification.That would likely trigger the program for events comparable to theBoston marathon bombing of 2013, which was not certified as aterrorism event.