The House quickly passed a bill Wednesday to reauthorize the lapsed Terrorism Risk Insurance Act, setting up a vote next week in the Senate to reinstate the backstop for insurance against terrorism attacks.
The program expired Dec. 31 after the Senate failed to act on a House-passed bill before leaving town.
Bypassing normal order to move the legislation quickly, TRIA again sailed through the House on Wednesday, by a vote of 416-5.
Senate Majority Leader Mitch McConnell said Wednesday morning that the Senate will “need to take action on that quickly as well.”
TRIA, which was passed in 2002 in the wake of the Sept. 11, 2001, terrorist attacks, provides a federal backstop for insurance against terrorism damages, a function that policyholders and insurers say is necessary for big projects throughout the country. The program, which was originally intended to be temporary, has broad support from industries ranging from real estate developers to the National Football League. It has never paid out a claim, although some critics say it subsidizes insurers by backstopping their policies.
The bill passed Wednesday extends the program for six years and changes the risk-sharing mechanism to shift some of the burden of payouts from the government to private industry.
The legislation also includes unrelated provisions, including a regulation pertaining to a national registry of insurance agents and a change to a technical aspect of financial regulation that affect contracts used by farmers and other businesses to hedge risks. In December, then-Sen. Tom Coburn, R-Okla., had held up a vote on the reauthorization over an objection to the insurance agent provision. Coburn is no longer in the Senate.
Rep. Peter King, R-N.Y., a strong supporter of the bill, asked the Senate to pass the measure quickly, saying that the House passed it on an accelerated basis to send “a strong signal that we support the bill in its entirety.”
Rep. Carolyn Maloney, a Democrat who represents parts of New York City, said TRIA was necessary to allow projects to go through without builders and lenders fearing terrorism-related damages. “After 9/11, you could not even build a hot dog stand” because of the cost of insurance, she said.
Although TRIA expired at the end of 2014, the market fallout has been minimal. Insurers and policyholders said there is effectively a “grace period” before policies will be canceled or loans withdrawn, based on the expectation that Congress would act quickly during the opening days of the 114th Congress to renew the program.
Property Casualty Insurers Association of America head David Sampson said after Wednesday’s vote that this “long-term legislation will minimize market disruptions, maintain the availability and affordability of terrorism insurance for consumers, and protect taxpayers.” Sampson called on the Senate to “send a final bill to the president’s desk in January.”
