Washington – The House passed a seven-year extension to the Terrorism Risk Insurance Act (TRIA) by a margin of 360-53. The passage of bill, which mirrors a version passed by the Senate, paves for the way for a signature by President Bush, who had threatened to veto a more ambitious TRIA extension passed by the House in September.
TRIA was originally passed in 2002. A two-year extension passed in 2005 and was set to expire on Dec. 31. It was this looming deadline that forced the House vote on the leaner bill.
“We are particularly pleased that the Congress and the White House are in agreement to extend the program until Dec. 31, 2014,” says Jason Schupp, senior VP, Zurich North America. “A stable program will allow insurers and policyholders to take a longer view of the terrorism risk, which was not afforded in the initial enactment or first extension.”
“By extending the program for seven years, Congress has abandoned the two-year patchwork approach of the previous extension and assured financial stability in the event of another terrorist attack,” says Charles Chamness, president and CEO, National Association of Mutual Insurance Companies.
The original House bill called for a 15-year extension, inclusion of group insurance and, most contentiously, a provision that insurers make available coverage for an attack involving nuclear, biological, chemical or radiological weapons.
Rep. Gary Ackerman (D–N.Y.), whose district includes Queens and Long Island, made his displeasure with the pared-down nature of the extension known on the House floor. “In the Senate’s mythical world, developers build stadiums, malls and national landmarks without funding, banks lend money without insurance, insurers underwrite policies regardless of risk; and reinsurers do the same, but on a yet more massive scale,” he said. “In the Senate’s fantasy world, the $30 billion in insured losses from 9/11 can be easily underwritten and capitalized, because unimaginable losses, such as those that would come from an attack with weapons of mass destruction just can't happen. And the reason they can't happen is because the U.S. Senate said so.”
Sources: Zurich, NAMIC, house.gov
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