The House Financial Services Committee plans to release draft legislation and hold a markup in June on Terrorism Risk Insurance Act reauthorization legislation, a key member of the committee said today.
The comments by Rep. Randy Neugebauer, R-Texas, chairman of the Financial Services panel's Housing and Insurance Subcommittee, reflect growing pressure on Republican members of the committee in the wake of draft legislation proposed by Neugebauer and Rep. Jeb Hensarling, also R-Texas, called the Terrorism Risk Insurance Modernization Act or TRIM, which would effectively phase out the current program after three years.
The industry is deeply concerned with the Neugebauer/Hensarling draft, as are other TRIA stakeholders, including insureds. They held a meeting last week in order to work out a strategy to soften the proposed language, which, apparently, has the support of House Republican leadership.
Neugebauer made his comment as part of his opening statement at an unrelated hearing convened by his subcommittee on legislative programs designed to "reform" regulation of the domestic insurance industry, but in practice designed to further limit federal oversight of the industry.
He said in his comments that he and Hensarling will be working with Republican members of the committee to finalize the TRIM draft, and that he also plans to "sit down" with Democratic members of the committee "in hopes of working on a bipartisan basis."
Neugebauer added, "From there we plan to release a draft bill with the intention of holding a mark-up in June."
It is known that Rep. Maxine Waters, D-Calif., ranking minority member of the full committee, is trying to round up enough Republican votes on the committee to support House passage of proposed Senate legislation, which is more consistent with the current version of TRIA.
The TRIM Act as drafted would bar any federal coverage for any event—other than that caused by a nuclear, biological, chemical radiation attack—of less than $500 million after the initial, three-year phase-in period. Essentially, the program trigger of $100 million per year before federal payments can be made would be retained only for NCBR-certified acts beginning in 2016. For non-NCBR acts, the trigger would rise to $250 million beginning in 2016, rising to $500 million in 2017.
It would also require insurers to deposit 50% of terrorism risk insurance premiums in a special fund that would be administered by the Treasury Department.
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