Washington – For the many interests with a stake in the fate of The Terrorism Risk Insurance Act (TRIA), there is no more precious piece of real estate right now than a conference table in Washington. That’s where, this week, two teams of conferees headed by Senate Banking Committee Chairman Christopher Dodd (D.-Conn.) and House Financial Services Committee Barney Frank (D.-Mass.), respectively, will assemble to try and reconcile their differing visions on the extension of TRIA.
The differences between the two bills are wide and, by now, well known. The House version calls for a broad, 15-year extension of TRIA. The Senate version, a compromise between Dodd, who represents insurance-centric Connecticut, and Ranking Member Richard Shelby (R–Ala.), no great fan of TRIA, covers seven years and is more modest in scope.
One issue sure to be at forefront for the committee is the expansion of the number of lines eligible for TRIA coverage. The House bill included coverage for life insurance, to the delight of the American Council of Life Insurers, that noted in the wake of 9/11 group life insurers had a tough time securing reinsurance. “Adding group life insurance to the TRIA program will help ensure that group life insurers will have the capacity to meet their commitments in the event of a catastrophic terrorist attack, and that group life insurance will remain available and affordable after such an attack,” says ACLI President Frank Keating. Critics counter that the life inclusion is an unnecessary and costly expansion of the program.
Another potentially more contentious issue is the mandate in the House version that carriers make coverage available for terrorist attacks involving nuclear, biological, chemical or radiological (NBCR) weapons. No such mandate exists in the Senate version. The Property Casualty Insurance Association of America (PCI) is among the opponents of the NBCR provision, fearing that its inclusion will drive smaller and mid-sized companies out of business. NBCR backers say that no private market for the coverage currently exists, or is likely to ever exist absent a mandate.
Several other factors will ratchet up the tension at the conference committee. One is time. TRIA was passed in 2002, and is set to expire on Dec. 31 2007. Frank publicly floated the idea of a temporary TRIA extension rather than yield to pressure from the looming deadline. Dodd faces more pressure to craft a bill amenable to his colleagues across the aisle than Frank, who saw his version of the bill sail through the House by a wide margin.
Another wildcard is the threat of a veto. Soon after the House bill passed, the White House called it an unacceptable expansion of the federal government’s role in the private sector. It soon softened its stance, saying the President would likely sign an extension that closely resembled the version produced in the Senate. How closely the compromised bill resembles either of its progenitors remains to be seen.
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