Washington– The House Republican leadership has arranged for aWednesday vote on a bipartisan House version of legislationextending the federal backstop for terrorism insurance, industrylobbyists and congressional staff said.

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The way was cleared for an extension of the Terrorism RiskInsurance Act under expedited procedures after the leadershipreached an agreement under which Judiciary Committee Chairman JamesSensenbrenner waived jurisdiction on the bill.

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Late last week, Judiciary Committee officials said that thecommittee had been granted a sequential referral on the innovativelegislation extending the TRIA program passed by the HouseFinancial Services Committee Nov. 17 by a 64-3 vote.

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But Peggy Peterson, a spokesman for Rep. Mike Oxley, R-Ohio,chairman of the Financial Services Committee, confirmed thisafternoon an agreement had been reached and floor action ispending.

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"The agreement paves the way for prompt House floor action," Ms.Peterson said. "Rep. Oxley is excited about the prospect of promptaction, and is confident the Congress will extend TRIA before itexpires Dec. 31."

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"Obviously, getting House floor action is a big step forward,"Ms. Peterson added.

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A strong House vote in favor of the bill would set the stage fora reconciliation process with a more bare-bones Senate bill beforeCongress adjourns for the year. The target date for adjournment isDec. 17.

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The decision to clear the bill for floor action comes aspressure on Congress from the business community continues togrow.

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Today the Financial Services Roundtable, a group made up ofinsurance, banking and investment company executives sent a letterto House Speaker Dennis Hastert, R-Ill. and Minority Leader NancyPelosi, D-Calif. urging passage of the measure.

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Over the weekend the TRIA subgroup of the American Academy ofActuaries issued a statement concluding that the "magnitude ofpotential insurance claims due to terrorist events makes permanentfederal legislation necessary in order to make terrorism coveragewidely and readily available."

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The subgroup based its conclusion on its analysis of thepotential impact of terrorist attacks and "how an insurer may reactto a sudden change in its perceived exposure to catastrophes."

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In a note to clients, Terry Haines, a lobbyist with theAlexander Strategy Group, said that "Judiciary is waivingjurisdiction and [Rep.] Oxley will move a clean bill (withoutlitigation provisions) to the floor this week. Suspension calendaris their hope and expectation."

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It was anticipated that had the bill been given over to theJudiciary Committee for further review, tort reforms limitingliability in cases of terrorism might have been added. Suchprovisions would have likely killed the bill because Democrats,especially in the Senate, would have opposed any such liabilitylimits.

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Steve Adamske, a spokesman for Rep. Barney Frank, R-Mass.,ranking minority member of the House Financial Services Committee,said Rep. Frank had not seen the wording of the final agreementyet, but "we want to move this along as fast as we can and get thisreauthorized as soon as possible."

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Industry lobbyists also confirmed that the logjam had beenbroken for House action this week.

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Charles Symington, senior vice president for federal legislativeaffairs at the Independent Insurance Agents and Brokers of America,said "the IIABA is very appreciative of the work that is being doneby Chairman Oxley and Rep. Richard Baker, R-La., [chairman of theCapital Markets Subcommittee of the House Financial ServicesCommittee] in moving this bill to the House floor as soon aspossible. We would also like to thank Chairman Sensenbrenner of theJudiciary Committee for working with Chairman Oxley to make thathappen.

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"We are hopeful that the House Republican leadership will takethe Financial Services bill up this week and then look forward to aspeedy conference to work the differences between the House andSenate bills."

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Julie Rochman, senior vice president for public affairs at theAmerican Insurance Association, said: "We understand that there areefforts amongst members at the highest level of the House to bringTRIA to the floor as soon as possible. We hope that the House andthe Senate will work out remaining differences so that a bill canget to President Bush's desk in the next couple of weeks."

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David Winston, senior vice president-federal affairs for theNational Association of Mutual Insurance Companies, added that"NAMIC greatly appreciates the agreement reached today by ChairmenOxley and Sensenbrenner on TRIA paving the way for its passage onthe House floor this week. It is absolutely essential to have ameaningful federal reinsurance backstop in place when TRIA becausescheduled to expire at the end of this year."

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House passage of the bill reported out by the House FinancialServices Committee is important to the industry because:

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o The House bill covers more lines of business than thebare-bones Senate bill.

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o It puts the government on the hook to come up with more moneybased on the ability of the industry to get reinsurance.

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o It provides more protection to smaller insurers againstinsolvency in the case of a large event.

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The House bill also establishes a roadmap for ongoing governmentinvolvement in terrorism risk insurance, whereas the Senate billends federal involvement when the bill sunsets on Dec. 31,2007.

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The House bill also adds coverage, for group life insurance,which was not covered in the original bill, passed in November2002. Under the bill, life insurers would have to retain the first21.5 percent of loss on group life policies in 2006 and 24 percentin 2007.

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