Insurers Fail To Win TRIA Extension Opposition in Senate dooms measure, but hope remains for lame-duck session
Washington
While action in the House to extend the Terrorism Risk Insurance Act was possible as this edition went to press, opposition in the Senate remains a roadblock, killing any hope of sending a TRIA bill to President George W. Bush before Congress adjourns to campaign.
However, the industry remains hopeful that a TRIA bill can win approval in a lame-duck session expected after Election Day.
"We will be unable to get the legislation through the Congress this week because there is just not enough time," Julie Gackenbach, a lobbyist for the Property Casualty Insurers Association of America, said on Oct. 7. "But we are hopeful that we can get a bill through the House today because that will give us some momentum going into the lame-duck session after the election next month."
The industry sought an extension this year of TRIA largely because it believes that more time is needed to establish an alternative private-sector system, as several industry officials testified at a recent Senate hearing. The industry is also concerned that underwriters would be on the hook for policies written in 2005 that extend into 2006.
However, the TRIA extension bill as passed by the House Financial Services Committee on Sept. 29, while extending TRIA for two years, until Dec. 31, 2007, fails to deal with that issue, although several Democrats sought but failed to win support for an amendment that would extend the federal safety net into 2008 for coverage written in 2007.
Another critical issue that appears to have lost momentum in Congress is the State Modernization and Regulatory Transparency (SMART) Act. The fact that the bill was never introduced bodes ill for the legislation making much progress in the next Congress even though it has strong support from several industry groups.
Opposition from the National Conference of Insurance Legislators and consumer groups slowed the momentum of the bill, which would provide a "road map" to reform and standardize state insurance regulation without creating an optional federal charter.
Other major federal legislative issues that failed to make much headway in this session were initiatives to reform the class-action system, medical malpractice litigation and asbestos suits.
Reproduced from National Underwriter Edition, October 7, 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.
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