A bill extending the Terrorism Risk Insurance Act (TRIA) program and establishing the National Association of Registered Agents and Brokers (NARAB II) was passed by the House on Wednesday and the Senate on Thursday. The bill is expected to be signed into law by President Obama in the next several days. The legislation also includes the National Association of Registered Agents and Brokers (NARAB II) legislation, which would establish a permanent NARAB to streamline agent licensing, which is intended to benefit small businesses and many insurance consumers.
Insurance industry associations widely supported the legislation and applauded the apparent fast tracking of the bill.
The Independent Insurance Agents & Brokers of America praised the U.S. Senate for passing the “Terrorism Risk Insurance Program Reauthorization Act of 2015,” H.R. 26, just one day after the 114th Congress voted on the same bill.
“Today’s bipartisan action by the Senate on both TRIA and NARAB II, in one of the first acts of the new Congress, represents a culmination of years of hard work of the Big I’ and our small business members, and I offer our members a sincere and heartfelt congratulations,” said Bob Rusbuldt, Big “I” president & CEO. “Long awaited reform on non-resident licensing for agents is finally coming.”
David A. Sampson, president and CEO of the Property Casualty Insurers Association of America (PCI), also was enthusiastic about the passing of the bill. “PCI is thankful to Congress for working with us on this priority for policyholders across America and our member companies,” Sampson said. “This vote is a significant win for consumers, taxpayers, and our members. This long-term legislation will minimize market disruptions, maintain the availability and affordability of terrorism insurance for consumers, and protect taxpayers. We also are grateful that NARAB II was included in the legislation. We urge President Obama to sign this legislation as soon as possible.”
If passed into law, H.R. 26 will extend TRIA for six years. The program expired on December 31, 2014, which the IABA said would have left much of the commercial P&C market and segments of the U.S. economy at risk to a terrorist attack.
“This is sound policy because it enables insurers and private sector capital to provide coverage for losses that otherwise would fall upon the taxpayer,” said Thomas J. Bisacquino, president and CEO of NAIOP, the Commercial Real Estate Development Association. “This vital security blanket could help save billions of dollars that would otherwise be spent in the aftermath of a terrorist attack. Renewing TRIA for six years represents a major victory for the commercial real estate industry and the millions of jobs and economic growth it supports. Today’s vote gives developers the peace of mind to invest in an industry that contributed $376 billion to GDP last year, supported 2.8 million jobs, and produced $120 billion in personal earnings.”
Over five years, the bill also would raise the amount of total losses before the TRIA program kicks in to $200 million, from the current $100 million, beginning in calendar year 2016. Over the same period, the mandatory recoupment increase by $2 billion each year to $37.5 billion, from $27.5 billion. For all events, the bill would raise the private industry recoupment total from the current 133 percent of covered losses to 140 percent of covered losses, IABA said. If passed into law, the bill will retroactively restore the federal reinsurance backstop for policyholders and the insurance market in the event of a catastrophic act of terror on American soil.
NARAB II would achieve much needed reciprocity in producer licensing and help policyholders by permitting greater competition among agents and brokers. This legislation would build upon regulatory experience at the state level, promote greater consistency in non-resident agent and agency licensing, ease the burden that many agents face in doing business across state lines, and increase consumer choice.
The Coalition to Insure Against Terrorism applauded the Senate for approving reauthorization of the bill. “CIAT members are pleased the Senate has acted quickly to approve TRIA reauthorization as one of the first orders of business in the new Congress,” said CIAT spokesman Marty DePoy. “We commend Majority Leader McConnell and Minority Leader Reid for their leadership in seeing this critical legislation through to completion, and are encouraged by the strong bipartisan support for reauthorization in both chambers. We now urge the president to immediately sign the measure into law so American businesses can rest assured TRIA is again in place to protect our economy from the devastating consequences of a major terrorist event.”
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