Terrorism risk insurance reauthorization legislation beingintroduced in the House will have a "punitive impact on smaller,regional and niche insurers and their policyholders" if it becomeslaw, the National Association of Mutual Insurance Companiessays.

The comments by Jimi Grande, NAMIC's seniorvice president of federal and political affairs, followed therelease of the "TRIA Reform Act of 2014" by the House FinancialServices Committee's Republican leadership. Rep. Randy Neugebauer,R-Texas, one of the primary sponsors, says he hopes the legislationcan be introduced by Monday.

The bill would increase industry liability over fiveyears to $500 million from the current $100 million forconventional terrorist attacks. It would also establish a separateprogram for nuclear, biological, chemical and radiation (NBCR)attacks.

By contrast, the Senate extends the program in its current formfor 7 years, but increases industry co-shares by one-third under a5-year phase-in period. The Senate bill is S. 2244, the TerrorismRisk Insurance Program Reauthorization Act of 2014.

The House bill implicitly acknowledges Grande's concern bycontaining a provision mandating that the Treasury Departmentprotect small insurers by issuing new rules exempting those facingfinancial hardship from the current program'smandatory-availability requirement.

In his statement, Grande calls the dramatic increase in thetrigger "an unacceptable change in the program."

He says increasing the program trigger "does not accomplish anyof the stated objectives of the TRIA program's critics—namely, itdoes not reduce taxpayer exposure or shift more of the risk to theprivate sector."

Rather, he says, it will serve to either concentrate risk orreduce overall take-up rates "as smaller and medium-sized insurersare forced from the program."

Grande did say that, "With just months until the TRIA programexpires, any sign of progress is a welcome one."

He argues that "extending TRIA should be a simple decision giventhe vocal support for the program from insurers, policyholders andthe communities they serve."

He adds, "Congress hasn't given itself much time, and westrongly urge them to start work on this bill and ensure thatterrorism coverage will be available next year for businesses andcommunities across the country."

At the same time, officials of the American InsuranceAssociation say they are "concerned" with other contrasts betweenthe expected House bill and the Senate version.

Willem Rijksen, an AIA spokesman, says the association "remainsconcerned with any potential provisions such as a bifurcatedapproach on NBCR and increases in the program's trigger andco-share that could lead to decreased market capacity."

The Property Casualty Insurers Association of America was moreguarded in its reaction to release of the House bill.

Nat Wienecke, PCI's senior vice president, federal governmentrelations, says only that PCI is "encouraged" by the release of theHouse draft proposal, adding, "We are working with members on bothsides of the aisle to bring legislation forward as quickly aspossible. It's urgent that Congress move quickly to finalizelegislation and send it to the President for his signature beforethe August recess."