House Panel Passes TRIA Extension

House Panel Passes TRIA Extension

By Arthur D. Postal and Matt Brady, Washington Bureau

NU Online News Service, Sept. 29, 2:34 p.m. EDT, Washington?Legislation extending the Terrorism Risk Insurance Act for two years, until Dec. 31, 2007, sailed through the House Financial Services Committee today.[@@]

The legislation was reported out on a voice vote after two Democrats withdrew an amendment that would have provided a soft landing?that is, extended the legislation into 2008 for all one-year contracts entered into in 2007.

Because the legislation?which includes group life insurance for the first time?contained language that in principle is being supported by the Bush administration as well as conservatives in the House, it will likely face an easy path to enactment before Congress adjourns by either Oct. 8 or Oct. 15. It is likely to be passed in some form by the full House by next Thursday.

Similar legislation is pending in the Senate.

Rep. Barney Frank, D-Mass., justified quick action on the extension by saying, "The argument for moving now is that we're talking about people planning the construction of commercial office buildings, and that's not something that can be done at the last minute."

The legislation extends TRIA until Dec. 31, 2007. It was introduced in July by Reps. Richard Baker, R-La., chairman of the Capital Markets Subcommittee of the panel, and Pete Sessions, R-Texas. It would extend the current TRIA legislation for two years, retaining the 15 percent individual company retention level scheduled to go into effect Jan. 1, 2005 through 2006, and increase that to 20 percent for 2007.

Some industry lobbyists and congressional staffers believe that to ease its path through Congress as it races to adjourn, it might be attached to legislation implementing the recommendations proposed by the 9/11 Commission. The committee took up that legislation after acting on the measures extending TRIA and clarifying that state regulators have oversight over sales of insurance on military bases, as well as other provisions.

Industry representatives voiced gratitude to the committee and its leadership for prompt action on the extension.

"We are extremely pleased that the House Financial Services Committee has taken action on this important bill, which is vital to the insurance industry's ability to cover catastrophic losses related to terrorism and also to preserving confidence in the market," said Robert A. Rusbuldt, chief executive officer of the Independent Insurance Agents and Brokers of America.

"Passage of this bill is crucial to providing certainty in the insurance marketplace," added Charles Symington Jr., senior vice president of federal government affairs for the IIABA. He called the measure "a must for many of the business clients of independent agents and brokers."

"The Big ?I' supports this legislation strongly and will continue to work with its industry partners and commercial policyholders to push for its speedy enactment," said Mr. Symington.

Mr. Symington and the Big "I" are also strongly urging the Senate to move quickly to pass S. 2764, a similar bill pending in the Senate, and praised Sens. Chris Dodd, D-Conn., and Bob Bennett, R-Utah, for working together to introduce the bipartisan legislation.

The Property Casualty Insurers Association of America also "commended" the panel for its action. Carl Parks, PCI senior vice president, government relations, added, "PCI and its member companies will continue the effort to move a TRIA extension through the Senate and House this year. This is still a great deal of work to do, but the case for a TRIA extension is clear."

Its easy path through the House is surprising, given that odds for passage of an extension this year was regarded as 10 percent by most industry lobbyists as late as a month ago.

Now, "this legislation has a very real chance of at becoming law this year," Mr. Parks said.

After the committee voted, the National Association of Professional Insurance Agents put out a statement saying they have launched a "nationwide grassroots action campaign" to urge Congress to pass the bill.

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