TRIA, OFC Bills Will Be Filed Soon in House

NU Online News Service

WASHINGTON --House members plan to introduce legislation extending the Terrorism Risk Insurance Act and creating an optional federal charter within the next 10 days, members of the Risk and Insurance Management Society were told.

At the same time, a legislative aide speaking at the "RIMS on the Hill" conference said current plans are to move updated legislation reforming regulation of the surplus lines and reinsurance markets directly through the House floor under expedited procedures, probably by mid-July.

Senate action on the surplus lines legislation is problematical. But the current Senate bill is likely to be updated to include language sought by RIMS that is specific as to who qualifies as an "exempt commercial purchaser."

The flurry of action is an effort to beat the clock stemming from the upcoming 10-day congressional recess, which begins June 29 and ends on July 9 for the Senate and July 10 for the House.

Rep. Ed Royce, R-Calif., and lobbyists attending the RIMS meeting said Rep. Barney Frank, D-Mass., could introduce the critical legislation extending TRIA as early as this week.

Rep. Royce said he would also introduce legislation next week creating an optional federal charter for insurers. He declined to identify potential Democratic co-sponsors of the bill.

The bill would be similar to legislation introduced in May by Senators John Sununu, R-N.H., and Tim Johnson, D-S.D., Rep. Royce said. The only change would be including a provision establishing prompt corrective action procedures against troubled insurers, a sort of early-warning system already in force for banks and thrifts.

At the same time, Scott Eckel, senior legislative for Sen. Sununu, said a hearing on the legislation would likely not be held until perhaps September, when the ailing Sen. Johnson is scheduled to return to the Senate.

Regarding TRIA, Rep. Frank and other Democrats on the House Financial Services Committee drafting the bill currently want the program extended for 10 years, according to lobbyists and congressional aides attending the meeting.

It also would include a provision specifically including group life insurance for the first time, according to a congressional official who declined to be identified.

Additionally, the measure would have provisions specifically insuring against chemical, biological, radiological and nuclear attack (CBRN) for the first time, according to other lobbyists attending the RIMS meeting.

This move would require all insurers to "make available" such CBRN coverage. Inclusion of such a provision is opposed by small insurers represented by the National Association of Mutual Insurance Companies and the Property Casualty Insurers Association of America.

The length of the bill's extension could be reduced in order to pick up Republican co-sponsors, such as Rep. Spencer Bachus, R-Ala., ranking minority member of the panel, according to one lobbyist attending the RIMS meeting.

The current plan is to hold a hearing on the TRIA bill June 21, with a Treasury Department official as the featured speaker, according to Debra Ballen, executive vice president for public policy management at the American Insurance Association, and Martin DePoy, steering committee coordinator for the Coalition to Insure Against Terrorism, a policyholder group.

Ms. Ballen said she expects the House to pass its version of TRIA legislation before the August recess, and the Senate to take up the bill in the "fall." The current legislation expires Dec. 31.

Regarding surplus lines, Amie Woeber, legislative director for Rep. Ginny Brown-Waite, R-Fl., said that since the bill passed the House, 417-0 last year, the current plan is to move it directly to House floor, with no committee action beforehand.

Two steps are necessary for such action: information from the Congressional Budget Office that the bill will have no budget impact, and a waiver from its sequential referral jurisdiction by the House Judiciary Committee, which has already occurred, Ms. Woeber said.