House Passes TRIA Legislation
Washington, DC – The U.S. House of Representatives today passed an extension to the Terrorism Risk Insurance Act (TRIA) by a vote of 360 to 53. The legislation, which is crucial to the continued development of large commercial real estate projects in cities, will extend TRIA for seven years and help spur the further development of a private market for terrorism risk insurance. After the 9/11 terrorist attacks, many insurance companies excluded terrorism events from their insurance policies. As a result, Congress passed TRIA as a three year temporary program in 2002, which created a federal backstop to protect against terrorism related losses. In 2005, Congress extended the program for two additional years. TRIA is now set to expire at the end of 2007 unless Congress acts again to extend the law. The measure will now be sent to the President for his signature.
“There are few issues as important to our nation’s economy as a stable, long-term federal support system for terrorism risk insurance. I applaud Chairman Frank and Speaker Pelosi for moving this critically important legislation forward,” said Rep. Carolyn Maloney (D-NY). “I am disappointed that the final TRIA bill omitted key elements of our stronger House legislation, but this is a solid compromise measure that will help stabilize the market and ensure the ongoing availability of affordable terrorism risk insurance.”
“Although the House bill to extend TRIA was stronger than the Senate version, I am pleased that this vital program will be renewed for seven years rather than another short-term extension of two or three years” said Rep. Gary Ackerman (D-NY). “However it is disappointing that Congressional Republicans and the White House, whose rhetoric is so tough on terror, missed an opportunity to stand-up to terrorists by not adopting the best possible TRIA bill. However we are confident that our legislation to include the ‘reset mechanism’ in TRIA will be enacted at some point, whether under this administration or the next.”
“TRIA has helped make terrorism insurance available and affordable to businesses, particularly those in our major urban areas. Without TRIA, many major development projects across the country could have been halted, putting many jobs and economic development opportunities at risk. Although I am disappointed that the stronger House version of this legislation did not get enacted, I am heartened that this important program will continue for years to come,” stated Rep. Mike Capuano (D-NY).
The legislation passed today is the Senate amendment to HR 2761 (original House TRIA bill) and includes the following provisions:
Domestic Acts of Terrorism: Incorporates domestic acts of terrorism
Duration: Extends TRIA for 7 years
Annual Liability Cap: Clarifies the $100 billion cap; requires Treasury to provide notice to Congress and promulgate regulations regarding the cap
Recoupment: Accelerates the timing of mandatory recoupment (recovering amounts paid by Treasury up to $27.5 billion).
Reports: Requires GAO studies of (1) insurance for nuclear, biological, chemical, and radiological terrorist events and (2) availability and affordability of terrorism insurance in specific markets