Terrorism insuranceSenate expects to extend terrorism insurance after House passes bill

After the House passed the Terrorism Risk Insurance Program Reauthorization Act of 2014 (TRIPRA) last week, supporters of the bill expect the Senate to approve it, although they are unsure when that will occur. The current version of the program is expected to expire by 31 December unless Congress renews the legislation or places a temporary extension. The legislation, initially known as TRIA, was created in November 2002 as a federal backstop to protect insurers in the event an act of terrorism results in losses above $100 million.

Lawmakers have several other businesses to attend to before the legislative session ends, including confirmation of nominees for executive and federal level positions. Senate Majority Leader Harry Reid (D-Nevada) has urged his colleagues to cooperate on completing the remaining tasks at hand. “We have some important stuff to do. We can complete everything we wanted to today,” Reid said on the Senate floor on Monday. “Everything is scheduled now for moving forward, we could finish it today.”

The insurance industry has reminded lawmakers of how important the bill is. More than fifty trade groups, including American Insurance Association, International Council of Shopping Centers, and the U.S. Chamber of Commerce signed a joint letter urging the Senate to pass the bill as approved by the House.

The House approved the bill last week, 417-17, and the last three times the Senate reauthorized TRIPRA, it was done by unanimous consent. “They are going to get it done,” Nat Wienecke, senior vice president, federal government relations at the Property Casualty Insurers Association of America, told Insurance Journal. “It’s hard to believe that the Senate would go home without getting this done.”

Earlier this year, Representative Paul Ryan (R-Wisconsin), speaking at the Financial Services Roundtable, predicted that TRIPRA would not pass the House until reforms were made to the bill, noting Congress may simply pass a short-term reauthorization bill. “The way I see this coming down is, it’s going to get extended,” Ryan said. “The question is: Do you do reforms now and negotiate, or do you just do a short-term extension into next year and then do negotiations?”

If passed by the Senate, the reauthorization bill, a result of negotiations and compromise between House Financial Services chairman Representative Jeb Hensarling (R-Texas) and Senator Chuck Schumer (D-New York) would extend TRIPRA for six years, increase the threshold for government reimbursement from $100 million to $200 million, and increase companies’ co-payments to 20 percent from 15 percent.