Washington–The likelihood that some of the more controversial provisions of House legislation extending the Terrorism Risk Insurance Act will make it into law was reduced today when the House Judiciary Committee was given jurisdiction.
Before today's move, it had been expected that the House would vote early next week on the TRIA extension bill reported out of the House Financial Services Committee just before Thanksgiving by a 64-3 vote.
However, the bill's move to Judiciary will delay House action and reduce the time for some of the bill's more controversial elements to be reconciled with a much simpler Senate version supported by the White House.
In addition, the move could also kill the bill altogether if litigation reform provisions demanded in the past by House conservatives are added by the Judiciary Committee.
After the House Parliamentarian granted referral to the Judiciary Committee, David Winston, senior vice president of federal affairs for the National Association of Mutual Insurance Companies sent out a bulletin to members notifying them that the referral will delay full House consideration of the bill (H.R. 4314).
The panel could also add a tort reform measure restricting punitive damages arising from a terrorist attack, said Mr. Winston's bulletin. "The legislative time constraints and the referral of the House bill to the Judiciary Committee may strengthen the prospects for the more streamlined Senate bill supported by the White House," he concluded.
Earlier, an industry lobbyist warned that "Capitol Hill staff has made it clear that tort reform provisions could sink the bill. Tort reform is the proxy for those who want TRIA to expire."
The lobbyist added that "as much as everyone in the industry supports tort reform, it is more important that we get this bill completed. Tort reform will never be accepted by the Senate."
If tort reform provisions are tacked on, it would draw fire from Democrats, who would have strong leverage because of the short time frame involved. TRIA expires on Dec. 31. Congress wants to wrap its current session by Dec. 17, and the Senate does not plan to return until Dec. 12.
The House bill as it now stands is vastly more complex than the Senate's version==passed by unanimous consent on Nov. 17==and includes a number of provisions opposed by President Bush. Indeed, talking points distributed by Treasury officials at a Nov. 30 "retreat" for House Republican leadership argued that the "current House TRIA extension bill contains fundamental flaws."
For example, the paper says the House bill, by removing company deductibles and creating separate silo deductibles for different lines of coverage, "adds significant lines and exposure," and "presents gaming opportunities for multi-line providers," citing AIG and The Hartford.
"Essentially," the White House paper said, "the House proposal expands the program by creating several 'mini-TRIAs'==a Workers' Compensation TRIA, a Property TRIA, a Casualty TRIA, a new Group Life TRIA, and a new NBCR [nuclear, biological, chemical, radioactive] TRIA."
Another potential objection to the House bill is its inclusion of domestic terrorism, which the current program does not cover.
The talking points assert that "the market for domestic terrorism insurance is functioning well without TRIA assistance. There appears to be no policy reason to add it into the program and this is another unwarranted expansion of the program."
Insurance industry officials declined to comment for the record on what one lobbyist privately called the "White House assault" on the House bill.
"It appears that earlier assurances by Treasury that they would not interfere with the House process have been abrogated," the lobbyist said, adding that Financial Services Committee Chairman Michael Oxley, R-Ohio, had been given "iron-clad assurances that his legislation would be considered on the House floor [this] week."
"There is every evidence that the floor vote will be consistent with the committee vote==strong and bipartisan," he added.
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