WASHINGTON–Lawmakers addressing an industry conference here revealed a division between the House and Senate over whether to approve permanent or temporary federal support for insurers against a major terrorism loss.
While both bodies favor a backstop for insurers' losses, the Senate is gearing up to pass a permanent measure, according to speakers at the legislative summit held by the Council of Insurance Agents and Brokers.
"I'm not going to do another temporary bill," advised Sen. Chris Dodd, D-Conn., the head of the Senate Banking Committee and a presidential candidate for the 2008 election. "We're either going to have a permanent bill, or we're going to move on," he vowed.
But a permanent measure "is not what we're looking for at this point," said Rep. Paul Kanjorski, D-Penn., the new chair of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprise.
Rep. Kanjorski said that without question the committee and the full House will pass a bill that will extend the Terrorism Risk Insurance Act, which expires at year's end.
Mr. Kanjorski said Rep. Barney Frank, D-Mass., who chairs the full Financial Services Committee, has asked that an extension bill be ready for action on the House floor by April 2, with the ultimate goal of being signed into law during the summer.
Sen. Dodd said that extending the TRIA program is also a high priority for his panel and that he expects little opposition to continuing the program, especially given Treasury Secretary Henry Paulson's support for the program prior to joining the Bush administration.
While not favoring a permanent measure, Mr. Kanjorski said the Financial Services Committee would like to consider a longer term extension of six years or more to avoid having the issue resurface in every Congress. "We're not going to do any of this year-to-year nonsense," he said.
Rep. Kanjorski added that he is "still optimistic" that a private market will develop for terrorism risk.
During his speech, Sen. Dodd said that "ideally" he would also like to see a private market solution to the problem, but "it hasn't happened."
Legislation aimed at streamlining the regulation of multistate surplus lines risks and reinsurance, which is expected to surface in both the House and Senate, drew more unanimous support.
Rep. Dennis Moore, D-Kan., said that he would be reintroducing the legislation in the near future along with Rep. Ginny Brown-Waite, R-Fla. She co-sponsored the measure when it came up last year.
The surplus lines bill was passed by the House then with no opposition, and Rep. Kanjorski predicted that "we're going to do it again" this year. The bill failed to gain any traction in the Senate, but Sen. Dodd said that the Banking Committee will "take a good look" at the measure this year and work toward passing it.
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