WASHINGTON—The insurance industry, supported by morethan 400 trade groups representing all types of businesses, sent aletter late yesterday urging the House to “move swiftly” in passinglegislation that would reauthorize the federal backstop forterrorism risk insurance.

“We write to you today to urge the House to move forward inreauthorizing this critical program as soon as possible,” theletter said.

The letter notes that the “tragic” terrorist attacks on 9/11“fundamentally changed the landscape” for insuring against the riskof terrorism in the U.S.

The letter said that President Bush's Council of EconomicAdvisers estimated that over 300,000 jobs were lost prior toinitial enactment in 2002 of the first law, the Terrorism RiskInsurance Act (TRIA). The program was later renewed for seven yearsin 2007. The current reauthorization sunsets Dec. 31.

Congress reconvened Monday after a five-week summer recess.

The sense of urgency stems from the fact that Congress will bein session for perhaps only two more weeks this month beforerecessing in order for members to campaign for mid-termelections.

The insurance industry fears that the odds for reauthorizationof TRIA in an acceptable form will drop precipitously if the Housefails to act on a bill acceptable to the industry until a lame ducksession after the mid-terms.

“We are telling members of the House that is critical that abill be passed this month so that we can get a long-term bill thisyear,” as stated by one industry lobbyist who asked not to bequoted. The reason, he said, is that lame duck sessions of Congressare “notoriously unpredictable, and we are trying to take theunpredictability out of the equation.”

In English, the lobbyist means in this case “notoriouslyunpredictable” means that the consensus of electoral pundits isthat Republicans will take control of the Senate through themid-terms.

That will strengthen the hand of Rep. Jeb Hensarling, R-Texas,chairman of the House Financial Services Committee, and fellowconservatives. What they are aiming for is to enact legislationthat phases out the current system over five years and replace itwith one that will provide a federal backstop after that periodonly for nuclear, biological, radiological, and/or chemical (NBCR)events.

As stated at a July hearing, Hensarling wants the lame-ducksession to pass an extension through August of the current versionof the Terrorism Risk Insurance Act.

His plan is to then get a more conservative Congress to passH.R. 4871, the TRIA Reform Act of 2014. That bill calls forgradually increasing the program trigger for all non-nuclear,biological, radiological, and/or chemical events, from $100 millionto $500 million by 2019, which industry officials say effectivelyphases out the program for non-NBCR events.

The Senate bill is S. 2244, the Terrorism Risk Insurance ProgramReauthorization Act of 2014.

The Senate raised the insurer co-pay from the current 15% to 20%and the mandatory recoupment from $27.5 billion to $37.5 billion[over five years].

In discussing the consensus Senate bill, Sen. Tim Johnson,D-S.D., chairman of the Senate Banking Committee noted that, “wewere careful” in reaching this compromise that the Senate did notraise the trigger, which would drive smaller insurers out of themarket and reduce affordability of coverage for businessnationwide, and that “this bipartisan bill does not pick what modesof terrorism attacks would get preferential treatment over theother forms of attacks.”

The letter sent yesterday said that 9/11 left the insuranceindustry “unable to model frequency, location, type and thepotentially devastating scale of modern terrorism.”

As a result, insurers were forced to pull out of themarketplace, and in the months following the attacks, the inabilityof insurance policyholders to secure terrorism risk insurancecontributed to a paralysis in the economy, especially in theconstruction, travel and tourism, manufacturing, and real estatefinance sectors, the letter said.

“The American business community needs certainty so that it cancontinue to focus on its primary mission of creating jobs,”the letter said. “The undersigned organizations urge Congress toreauthorize this important program without delay.”