Senate Panel Agrees On TRIA Language

WASHINGTON–Agreement has been reached by the leadership of the Senate Banking Committee on bare-bones legislation extending for seven years federal supports to insurers after terrorism catastrophes.

The bill to extend the Terrorism Risk Insurance Act for seven years after its expiration date of Dec. 31 would continue the current trigger on the program, which is $100 million.

A vote on the bill has been scheduled by the committee for Wednesday, National Underwriter learned.

The higher trigger was a disappointment for smaller insurers. They won a lowering of the current $100 million trigger in much broader legislation passed by the House late last month.

Within the three-page bill there are no provisions dealing with nuclear, biological, chemical or radiation events and no extension of the program to cover group life insurance, all of which are part of the House measure.

Smaller property-casualty insurers had voiced opposition to such a provision, claiming that forcing them to “make available” coverage for NBCR if they wanted to participate in the program could force smaller insurers out of business from only a relatively small attack.

Also, in contrast to the bill passed overwhelmingly by the full House in late September, the legislation contains no provision providing extra help for those that have already suffered a terrorist attack, like New York.

At the same time, the panel will also vote on legislation extending the National Flood Insurance Program that is similar to the legislation passed by the committee last year.

Work on the TRIA extension legislation was completed late Friday by the staffs of Sen. Chris Dodd, D-Conn., chairman of the panel, and Sen. Richard Shelby, R-Ala., ranking minority member.

Sen. Shelby has been an outspoken opponent of terrorism risk insurance legislation, and his support for a relatively long extension is considered a breakthrough by the industry.

An industry lobbyist who has been working on the bill but asked not to be named said this morning, “This looks to be a splendid compromise, given the distance throughout the year between Chairman Dodd and Sen. Shelby.

“Consistent with past practices of the Banking Committee, I expect it to be approved on Wednesday without acrimony,” he said. “While it's too early to envision the timing of full Senate action, this does move the ball considerably down the field.”

He added, “Certainly, there will continued to be spirited debates–over group life, NBCR, deductibles and pay-go provisions.

“But the most important thing is that the program is extended for a predictable amount of time, and this looks to be an excellent compromise,” he said.