TRIA Extension Bill On Fast Track In House

Since 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 House enactment before Congress adjourns by either Oct. 8 or Oct. 15. Indeed, it is likely to be passed in some form by the full House this week.

Similar legislation is pending in the Senate. However, in a note to investors, Jay Gelb, an analyst at Prudential Equity Group, said that because of uncertainty as to whether Sen. Richard Shelby, R-Ala., will act on the bill, "a top industry lobbyist believes the prospects for extending TRIA by year-end merit odds on a cautious side of a toss-up."

In his note, Mr. Gelb explained that a "bipartisan bill in the Senate may have a harder time getting through the Senate Banking Committee because Sen. Shelby has made it clear he wants to take his time and has resisted the
request of some Banking Committee members to act on extending TRIA this session."

Rep. Barney Frank, D-Mass., justified quick action on the extension by saying that "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. The bill was introduced in July by Reps. Richard Baker, R-La., who chairs 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, the bill 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 on sales of insurance on military bases.

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 & Brokers of America in Alexandria, Va. "We thank Chairman Oxley and the whole committee for approving this critical bill, and we call on the full House to pass it as quickly as possible."

Charles Symington Jr., senior vice president of federal government affairs for the IIABA, said his association is strongly urging the Senate to move quickly to pass its companion TRIA legislation S. 2764?and praised Sens. Chris Dodd, D-Conn., and Bob Bennett, R-Utah, for working together to introduce the bipartisan bill.

The Washington-based American Insurance Association, while noting the strong support the bill received in the House Financial Services Committee, said the industry must continue to work intensely to ensure TRIA extension is passed in the Senate before Congress recesses to campaign.

"Time is running short, and there is still much work to be done before this bill can be signed into law," noted Leigh Ann Pusey, AIA's senior vice president for government affairs. "We know that there is broad, bipartisan support in both the House and Senate for TRIA extension legislation. While we want to thank Chairman Oxley, Rep. Frank and other members of the committee on both sides of the aisle for their leadership on this vital issue, we also want to note that we will continue to work side-by-side with the commercial insurance policyholder community to make sure Congress finishes the job this year."

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

Reproduced from National Underwriter Edition, October 1, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.