WASHINGTON, DC—At one point it seemed the renewal of the Terrorism Risk Insurance Act was gaining momentum and on track to comfortably meet its yearend deadline. That optimistic view, though, did not take into account an unexpected vote to consider President Obama's request for funding a stepped up attack against the Islamic State of Iraq and Syria – or the possibility that Congress would adjourn early. Which it did last week.

On Thursday the House sent representatives home more than a week earlier than expected for a fall session that already had been cut short. They won't be back until after the elections, leaving a fairly short period for the act to be renewed.

Lobbyists for the act, a group that represents an array of industries from real estate to insurance, are planning a huge push for November, according to a report in The Hill newspaper.

Much, though, is uncertain precisely because of the election. If the Republicans win the Senate, as many pundits are predicting they will, victory will likely fuel House of Representative demands to scale back the act.

Earlier this year the House Financial Services Committee approved a bill that would extend TRIA for five years but dial back the federal government's support. The insurer copay would be increased to 20% and the backstop only comes into play when losses reach the $500 million mark. The bill has not been put to vote to the full House.

The Senate voted to renew the terrorism insurance law in a cleaner bill on July 17 for seven years.

Until the matter is settled the industry is going to worry, results from a recent Real Estate Roundtable survey showed.

"Commercial real estate remains on a generally positive path, yet there is significant concern about Washington inaction on a range of policy matters affecting our industry," said Roundtable President and CEO Jeffrey D. DeBoer, in a prepared statement. "The most pressing of these is TRIA, whose potential expiration could trigger a wave of technical defaults, renewed problems for banks and bond holders, and lost jobs as financing for new and existing projects dries up," he said.

Instant Insights /

Congress Cutting it Close on TRIA

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