Senate Banking Committee Passes ALTA-supported Bill to Extend Terrorism Risk Insurance Program
June 3, 2014
The Senate Banking Committee on June 3 approved S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014, by a unanimous vote of 22-0.
The bill, sponsored by Sen. Chuck Schumer (D-NY), extends the existing TRIA program for seven years while taking steps to further protect taxpayers. Under S. 2244, the federal government would reduce the amount of reinsurance it provides for terrorism-related losses by 1% each year. The goal is to increase the amount of losses insurance carriers hold by $10 billion over the course of seven years.
“The extension provided by S. 2244 will continue to promote job creation and provide certainty for businesses, both small and large, and for those who manage commercial properties, including stadiums, hotels, universities and malls throughout the country,” said Sen. Tim Johnson (D-S.D.), chair of the Senate Banking Committee.
Legislative action on the TRIA Program is uncertain in the House Financial Services Committee. Housing and Insurance Subcommittee Chairman Randy Neugebauer (R-TX) publicly outlined specific principles several weeks ago and is close to releasing his version of a TRIA extension.
In April, ALTA signed a coalition letter supporting the extension of the program. The letter stated:
“The tragic terrorist attacks on 9/11 fundamentally changed the landscape for insuring against the risk of terrorism in the U.S. Struck with an inability to model frequency, location and the potentially devastating scale of modern terrorism, insurers were forced to pull out of the marketplace, and in the months following the attacks, the inability of insurance policyholders to secure terrorism risk insurance contributed to a paralysis in the economy, especially in the construction, travel and tourism, and real estate finance sectors.
“Since its initial enactment in 2002, TRIA has served as a vital public-private risk sharing mechanism, ensuring that private terrorism risk insurance coverage remains commercially available at virtually no cost to the taxpayer. TRIA fosters certainty in the marketplace and allows all of these interconnected elements of the economy to continue to move forward.”
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