WASHINGTON, DC—Acknowledging that the private sector does not have the bandwidth of solely support a terrorism insurance market, House Financial Services Committee Chairman Jeb Hensarling (R-TX) introduced a bill that would extend the Terrorism Risk Insurance Act for five years for full committee markup.
"I remind all that TRIA, when originally envisioned, was meant to be a transitional program," Hensarling said. "However, after carefully studying the issue, I have concluded that today there remains a need for a Federal backstop against heinous acts of terrorism that cannot be reasonably modeled, reasonably mitigated, and whose catastrophic size truly impacts our economy."
Under the proposed legislation, the federal government will continue to provide a backstop program for insurers that provide insurance against acts of terrorism.
The bill, though, does dial back the federal government's support. The insurer copay has been increased to 20% and the backstop only comes into play when losses reach the $500 million mark. Also, the act calls for separate treatment of "conventional" terrorism and nuclear, biological and radiation attacks, or NBRC.
Earlier this month the Senate Banking Committee unanimously approved the extension.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
