TRIA renewal moves closer following US Senate vote

Last Thursday the US Senate voted by 93-4 to approve its Terrorism Risk Insurance Program Reauthorization Act of 2014-S. 2244. It would maintain the current TRIA trigger for catastrophic terrorist attacks of all kinds at US$100m but would require insurers to shoulder a greater share of losses from future attacks. The deductible insurers would pay before federal aid steps in would increase by US$2bn annually from the current US$27.5bn, until it reaches US$37.5bn in five years. Last month, the House of Representatives' Financial Services Committee voted by 32 to 27 in favour of approving its proposed extension of TRIA through to 2019, but with amendments aimed at encouraging more robust private market participation.hideIts bill proposes a clear differentiation between conventional terrorist attacks and those involving nuclear, biological, chemical and radiological (NBCR) weapons. Under its plans the federal backstop would kick in for conventional attacks where losses are in excess of US$500m, compared with the current US$100m. The insurance industry's stake would rise to 20% of insured losses from the current 15%. The trigger for NBCR losses would remain at the lower level. The two bills will now need to be reconciled. Buyers' association RIMS was quick to welcome the quick passage of the Senate's proposals and said it is an encouraging sign for global business. It urged the House and the Senate to quickly resolve the reauthorisation of TRIA that is set to expire at the end of this year. "With the House and the Senate both in agreement that the need for a reauthorised TRIA bill is a necessity, it's time for the two groups to come together and devise a final version," said RIMS president Carolyn Snow. "A common misperception is that TRIA only impacts organisations here in the United States. Any global business that has facilities, employees or components of their supply chain here in the US will be affected should TRIA expire. This is a worldwide insurance issue." The Coalition to Insure Against Terrorism also called for swift House action. "The Senate's strong bipartisan vote for this legislation underscores the importance of TRIA and the need for reauthorisation," said Marty DePoy, the coalition's steering committee coordinator. "We hope the House will move just as quickly, in order to get a final bill for the president's signature well before the end of the year." Insurers also welcomed the senate vote, which appears to be closer to the industry's preferred conditions for renewal of TRIA. "Today's vote is an important step towards keeping in place the vital protections for the American economy that the Terrorism Risk Insurance Program provides," said Charles Chamness, President and CEO of the Indianapolis-based National Association of Mutual Insurance Companies. Nat Wienecke, Senior Vice President of Federal Government Relations at the Property Casualty Insurers Association of America, said: "It is great to see members of both parties come together in a broad bipartisan fashion to support America's economic resiliency plan to recover from terrorist attacks." Adding: "This long-term legislation will minimise the disruptions, maintain the availability and affordability of terrorism insurance for consumers and protect taxpayers."

TRIA renewal moves closer following US Senate vote

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