Washington, D.C. - The House Financial Services Committee today passed H.R. 2761, the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA) by a vote of 49 to 20.
The legislation will extend the Terrorism Risk Insurance Act (TRIA) for fifteen years and help spur the further development of a private market for terrorism risk insurance. After the 9/11 terrorist attacks, many insurance companies excluded terrorism events from their insurance policies. As a result, Congress passed TRIA as a three-year temporary program in 2002, which created a federal backstop to protect against terrorism related losses. In 2005, the measure was extended until 2007.
H.R. 2761 was introduced in the House on June 18, 2007 and is sponsored by Rep. Michael Capuano (D-Mass.) and House Financial Services Committee Chairman Barney Frank (D-Mass.). Since its enactment, TRIA has ensured the availability of affordable terrorism risk insurance in the marketplace and thereby fostered continued urban development and real estate development in the United States.
The Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA) will include provisions to:
* Extend TRIA for 15 years with current co-payments and deductibles for conventional terrorism acts; * Expand TRIA's "make available" requirement to include NBCR coverage; * Change TRIA's definition of terrorism to include acts of domestic terrorism; * Set the program trigger at $50 million; * Add group life insurance to the lines of insurance for which terrorism coverage must be made available; * Decrease deductibles for terrorist attacks over $1 billion and decrease the trigger after such events; and, * Continue to require studies of the development of a private market for terrorism risk insurance. Insurance industry groups have praised the passage of the bill. Both the American Insurance Association and the National Association of Mutual Insurance Companies are expected to issue formal statements on the matter.
The Independent Insurance Agents and Brokers of America (IIABA) also hailed the passage of the bill, expressing hope that it will be signed into law prior to the program's expiration at the end of the year.
"This legislation is crucial for the business customers of independent agents and brokers and for our nation's economic security," said IIABA CEO Robert Rusbuldt in a statement. "The Big 'I' commends Rep. Capuano and Chairman Frank for advancing this bill that will continue to keep terrorism insurance coverage both available and affordable."
Sources: House Committee on Financial Services, Financialweek.com
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