The House won't accept the Senate version of legislation providing a federal backstop for terrorism risk insurance, a key congressman said last week, proposing to temporarily extend the current program while differences are worked out.
Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, made his comments in an appearance before the annual meeting of the Property Casualty Insurers Association of America.
"My concern is that the Senate will pass a bill that is better than nothing right at the end of the year, and then say the House must take it or leave it, even if we believe it is inadequate," Rep. Frank said at the meeting.
He continued, "I will not be subjected to this kind of tactic," explaining that he would propose a "bridge bill" to extend TRIA as is through April 30, 2008 "to allow for further debate and give us plenty of time to do what is best for this country."
In confirming Rep. Frank's remarks, Heather Wong, a spokesperson for the congressional committee chairman, clarified that what he meant was that accepting the Senate Banking version as a fait accompli was unacceptable.
The bill passed by the Senate Banking Committee Oct. 17 and accepted by the Bush administration has few of the bells and whistles contained in the House bill.
It calls for a seven-year extension of the current program and removes the distinctions in the current legislation between domestic and foreign terrorism. It also retained the current "trigger" for federal involvement at $100 million; the House bill reduces the "trigger."
The House bill is much different and more elaborate, and has yielded a veto threat from the White House. It would extend the program by 15 years, add coverage of nuclear, biological, chemical and radiation risks, and require all insurers to "make available" NBCR coverage if they want to participate in the program.
It would also give a break to areas hit by a prior terrorist attack and add group life insurance to the program.
At the PCI meeting, Rep. Frank said he very much wants coverage for group life insurance added to the TRIA program in any final bill. "Terrorism coverage without group life is like the neutron bomb–it protects the property but not the people in it. I am not comfortable with that."
Industry representatives voiced concerns in reaction to Rep. Frank's statements.
Cliston Brown, a PCI staff official, said: "The Bush administration has made it clear that it would veto the House bill and that it would oppose any additional program expansions in the Senate bill.
"As a result, we think it's clear that the current Senate version of the bill is…the most politically viable means of extending the terrorism risk insurance program before its Dec. 31 expiration date."
An industry lobbyist said Rep. Frank's proposal is presenting major segments of the insurance industry and commercial policyholders with a "conundrum."
In a nutshell, said the lobbyist who asked not to be identified, much of the industry "strongly" prefers the House version of the legislation, which was passed by the full House in late September, and especially the leadership of Rep. Frank on the issue.
At the same time, however, "the industry is aware that given the opposition of key Senate Republicans and the White House to the very idea of a significant extension of the program, the industry is prepared to accept the Senate Banking bill as the best it can get," the lobbyist said.
He also noted that smaller insurers overwhelmingly support the Senate version, because it eliminates the NBCR provisions of the House bill.
At the PCI meeting, Rep. Frank said getting a bill passed to extend TRIA long-term is going to be problematic given the procedural hurdles in the U.S. Senate, where 60 votes are required to halt debate and get legislation passed. "The U.S. Constitution has been amended de facto by the rules in the Senate," he said.
In his comments about the potential "take-or-leave" Senate tactics, Rep. Frank clearly had in mind what occurred the week before Christmas in 2005, when the Senate Banking Committee refused to appoint conferees to reconcile differing versions of TRIA legislation, forcing the House to accept the Senate version.
Rep. Mike Oxley, R-Ohio, then chairman of the committee, voiced outrage on the House floor at the behavior of the Senate but admitted he could do little about it.
The industry lobbyist said, "We have been down this road twice before on TRIA–and it is a road that is consistent with congressional actions in general and the cultural differences between the House and Senate," he said.
"Senate Banking Chairman Dodd's preference is for a more expansive bill, but everyone seemed to agree that he did a fine job in working out a compromise with Senator [Richard] Shelby, R-Ala., who had not only the Republicans in his conference behind him but the administration as well," the lobbyist added.
"Most of us are hopeful that Chairman Frank's comments will move the ball a bit, but it's currently hard to see how a four-month extension significantly changes the political dynamics that otherwise tilt toward the Senate version," he added.
(Additional reporting by Sam Friedman.)
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