WASHINGTON—There appears to be no momentum for House action on legislation reauthorizing the federal backstop on terrorism risk insurance during the current two-week session.
The current version of the Terrorism Risk Insurance Act sunsets Dec. 31. But, Congress is expected to be out of session from Sept. 19th until after the mid-term elections.
R.J. Lehmann, editor-in-chief and a senior fellow of the R Street Institute, a conservative Washington think-tank, said House Republicans appear to have been unable to secure enough votes to push through legislation reported to the floor by the House Financial Services Committee in July over the next two weeks.
That legislation, H.R. 4871, is already onerous, effectively phasing out terrorism risk insurance for anything over than for nuclear, biological, radiological, and/or chemical (NBCR) events.
There appears to be some momentum in the House, according to Lehmann, to support passage of legislation in the current session that would raise the threshold for a federal backstop for terrorism risk insurance from the current $100 million to $250 million.
The House appears stuck on the issue even though the Chamber of Commerce has established a coalition of 400 trade groups encompassing all of U.S. commerce and industry to push for passage of a bill on a timely basis.
In an op-ed today in a political newspaper circulated on Capitol Hill, Leigh Ann Pusey, president and CEO of the American Insurance Association, urged the House to act.
“The Senate voted overwhelmingly in favor of the legislation, which ensures businesses can continue to get the insurance they need to protect themselves and the nation’s economy from potentially catastrophic terrorist attacks,” Pusey said.
“But the House has yet to act,’ she added. “Considering TRIA’s importance to our nation’s economic security, the House should move quickly to approve TRIA reauthorization legislation so this vital program is renewed’” Pusey added.
The Coalition to Insure Against Terrorism (CIAT), which represents the business insurance policyholders as well as the real estate, manufacturing, utility, construction, transportation, entertainment and retail sectors, sent its own letter Tuesday urging prompt passage. The NAIC also sent a letter Tuesday asking the House to act in the current session.
“With only a handful of legislative days remaining before the November elections, Congress must move quickly to approve legislation that will ensure TRIA remains in place for years to come,” CIAT spokesperson Martin DePoy said in the letter.
“There is no homeland security without economic security,” DePoy said. He said TRIA “helps undermine terrorists who seek to weaken or destroy our way of life by ensuring our economy can more easily recover in the event of an attack.”
The NAIC letter noted the particular impact on the workers compensation insurance market.
“An expiration of TRIA would be particularly disruptive to the workers’ compensation market,” the NAIC letter said. “Workers’ compensation benefits are codified in state law and an employer cannot decline to provide coverage for acts of terrorism.”
The NAIC letter added that, “Without TRIA, workers’ compensation insurers will likely raise prices or decline to write coverage for businesses with many employees concentrated in single locations or near iconic properties.”
The House bill, H.R. 4871, the TRIA Reform Act of 2014, calls for gradually increasing the program trigger for all non-nuclear, biological, radiological, and/or chemical (NBCR) events, from $100 million to $500 million by 2019, which industry officials say effectively phases out the program for non-NBCR events.
The Senate bill is S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014.
The Senate raised the insurer co-pay from the current 15 percent to 20 percent and the mandatory recoupment from $27.5 billion to $37.5 billion [over five years].