This week in Washington, lawmakers on the Senate Banking Committee voted 22-0 to extend the Terrorism Risk Insurance Act (TRIA) (S. 2244), the federal backstop for terrorism insurance, for seven years. The bipartisan measure was championed by Senators Charles Schumer, D-N.Y., and Dean Heller, R-Nev., and is expected to come up for a vote in the full Senate within the next few weeks.
The Terrorism Risk Insurance Program was first enacted in 2002 after insurers incurred $32 billion worth of claims from the 9-11 attacks. Congress renewed the law in 2005 and in 2007. The current program - that guarantees government reimbursement to insurers covering a terrorist attack after the industry’s aggregate losses exceed $100 million - is set to expire at the end of this year. If it is allowed to expire, borrowers will be in technical default of their loan and will most certainly face other economic uncertainties.
In the House, while several bills have been introduced to simply extend the program, all serious attention is focused on a discussion draft expected to be introduced by Representative Randy Neugebauer, R- Texas, along with the support of House Financial Services Committee Chairman Jeb Hensarling, R-Texas. That measure takes a distinctly different approach than the Senate bill and seeks to reform the program to reduce taxpayer exposure.
The draft, for example, proposes a shorter extension of the program and seeks to limit the federal backstop for attacks with conventional weapons - or non-Nuclear, Biological, Chemical or Radiological weapons. In contrast, the Senate bill maintains the current treatment for all acts of terrorism at the defined trigger level, in addition to the seven year reauthorization. Overall it is expected that the House measure will seek to reform the current program in other ways that will attract opposition from the insurance industry.
NMHC/NAA, and our policyholder partners in the Coalition to Insure Against Terrorism, are actively advocating for a TRIA extension. We sent a letter to the SenateBanking Committee just prior to this week’s vote supporting the bill and encouraging speedy floor action.
- Senate Takes an Early Look at Terrorism Risk Insurance Reauthorization
- Coalition Letter to Senate Banking Committee Regarding Terrorism Risk Insurance - June 2019
- Multifamily Industry Applauds Terrorism Insurance Passage
- NMHC/NAA Applaud Passage of Terrorism Insurance by Congress
- Congress Goes Home Without Renewing Terrorism Insurance