The House Financial Services Committee voted to extend the federal Terrorism Risk Insurance Act on Wednesday, but not before adding another five years to the legislation.
The bill was approved by a vote of 49-20.
The added five years, which would keep the program running until 2022, came via an amendment proposed by Rep. Peter King, R-N.Y., the former chairman and current ranking minority member of the House Homeland Security Committee, and Rep. Gary Ackerman, D-N.Y.
The amendment was approved by a vote of 39-30, with several Republicans cautioning during debate that the supporters might be asking too much.
Rep. Richard Baker, R-La., said: "You may well lose more than some Republican votes. You may have lost the bill."
Rep. Baker said the extension would put the bill under a "veto threat." The committee's ranking Republican, Rep. Spencer Bachus, R-Ala., introduced a letter from Treasury Secretary Henry Paulson stating that the Bush administration is "strongly opposed" to the TRIA extension.
Committee Chairman Barney Frank, D-Mass., however, noted that two years ago members of the panel received a letter from then head of Goldman Sachs Henry Paulson, stating his belief that a private market would not develop in the absence of the TRIA program.
"He's entitled to follow administration policy," Rep. Frank said. "We're entitled to know that's going on."
Other amendments sought to address concerns regarding the scope of the program and its impact–particularly the effect of the legislation's "make available" requirement for nuclear, biological, chemical and radiological attacks on small insurers. Under an amendment offered by Rep. Donald Manzullo, R-Ill., the Treasury secretary would be authorized to exempt small insurers from the requirement, if the Treasury determined it would put them at risk for insolvency.
The bill also established a new threshold for the legislation's "reset" provision. That provision would reduce the threshold for federal intervention–from $100 million to $50 million–in the years following a terrorist attack inflicting more than $1 billion in insured losses.
Although Republicans cautioned the expanded bill would face a tougher road in the Senate, Senate Banking Committee Chairman Chris Dodd, D-Conn., praised the vote approving the TRIA extension.
"To better prepare our nation's economy against any future terrorist threat, we need to provide a federal backstop that will continue to allow our economy to prosper," he said. "That is what TRIA has done, and needs to continue to do in the future."
Insurance industry groups also approved passage of the bill.
"This bill strikes an appropriate balance and addresses the needs of insurers–both big and small–and the needs of policyholders who collectively seek a workable means of providing this economic safety net," said Marc Racicot, president of the American Insurance Association (AIA).
Marliss Browder, senior federal affairs director for the National Association of Mutual Insurance Companies (NAMIC), applauded the changes made to the bill via the amendments.
"These changes were among NAMIC's top priorities, and we are very pleased with them," she said.
The Independent Insurance Agents and Brokers of America (IIABA) also hailed the passage of the bill, expressing hope that it will be signed into law prior to the program's expiration at the end of the year.
"This legislation is crucial for the business customers of independent agents and brokers and for our nation's economic security," said Robert Rusbuldt, IIABA chief executive officer.
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