TRIA Extension, OFC Bills On The Move

House members plan to introduce legislation extending the Terrorism Risk Insurance Act and creating an optional federal charter before month's end, members of the Risk and Insurance Management Society were assured here.

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 problematic, 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,” attendees were told.

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 legislation extending TRIA later that week, after this edition went to press. (Check NU's Online News Service for updates at www.propertyandcasualtyinsurancenews.com.)

Rep. Royce said he would also introduce legislation 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., according to Rep. Royce, who said the only change would be addition of a prompt corrective action provision against troubled insurers–a sort of early warning system already in force for banks and thrifts.

At the same time, Scott Eckel, senior legislative aide 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.

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

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

This move would require all insurers to “make available” such CNBR 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 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.

A hearing on the TRIA bill will be held on June 21 before the Capital Markets Subcommittee of the House Financial Services Committee, with a Treasury Department official as the featured speaker.

Debra Ballen, executive vice president for public policy management at the American Insurance Association, said she expects the House to pass its version of TRIA legislation before the August recess, and the Senate to take up the bill sometime this fall. The current legislation–providing a federal reinsurance backstop for terrorism exposures–expires Dec. 31.

Regarding surplus lines, Amie Woeber, legislative director for Rep. Ginny Brown-Waite, R-Fla., 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, according to Ms. Woeber.