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Congress Back in Session This Week, Short Window for TRIA

Congress comes back into session this week following its 4th of July recess...
July 10, 2014

Congress comes back into session this week following its 4th of July recess. One big item still pending is renewal of the Terrorism Risk Insurance Act (TRIA), which PIA strongly supports.

The Senate has passed a bipartisan bill renewing TRIA for seven years and is more consistent with the current program. The House Financial Services Committee passed a controversial five-year TRIA renewal bill on a party-line vote that attempts to put the backstop on a path toward phasing it out. The entire insurance industry favors the Senate version. PIA is continuing our advocacy for as straightforward, long-term a reauthorization of TRIA as possible. Lawmakers have only four weeks to resolve the many differences between their respective TRIA bills before leaving town once again, when they will largely remain out of session until the November elections.

On July 8, the National Association of Mutual Insurance Companies (NAMIC), the Property Casualty Insurers Association of America (PCI), the U.S. Chamber of Commerce and the Commercial Real Estate Finance Council sent a joint letter to House Speaker John Boehner and Minority Leader Nancy Pelosi, expressing concerns about the House bill.

“Small and medium-sized insurers represent almost 98 percent of all insurers writing TRIA coverage and almost half of all TRIA-related premiums,” the letter stated in part. “Increasing the trigger from $100 million to $500 million will subject small and medium-sized insurers to a massive increase in their liabilities. This dramatic liability increase could not only limit the amount of terrorism insurance coverage most insurers are able to provide to Main Street businesses but it could also impair their ability to offer the underlying non-terrorism commercial coverages, creating harmful, negative consequences for the economy and job growth. Reducing terrorism insurance availability and affordability would be counter to TRIA’s stated purposes.”

The nonpartisan Congressional Budget Office (CBO) estimates that TRIA has no projected net cost. According to a new study by the RAND Corporation, TRIA could actually save American taxpayers billions of dollars in the event of another terrorist attack. The study concluded that failure to reauthorize TRIA could increase federal spending by as much as $7 billion for terrorist attacks similar in magnitude to 9/11.

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