Update 12/10/2014 5:12 p.m.: House passes TRIA by 417-7 votes. Total support from Democrats; 7 nays from Republicans. It’s off to the Senate….
With Congress having 21 days to re-authorize the Terrorism Risk Insurance Act (TRIA), passage has been stalled and removed from cromnibus budget negotiations, putting the program at risk.
Some fear the move could jeopardize TRIA re-authorization, which would adversely affect workers’ compensation and other commercial insurance.
As of yesterday afternoon, TRIA was one of the major remaining roadblocks in cromnibus negotiations, according to Politico. (For those who do not live inside-the-beltway politics, cromnibus refers to measures Congress has approved to keep the federal government funded to avoid a shutdown.)
At issue is Republicans’ desire to revise the 2010 Dodd-Frank Act, which created the Federal Insurance Office and financial regulations. House Financial Services Chairman Jeb Hensarling (R-Texas) is pushing changes to Dodd-Frank, while Sen. Chuck Schumer (D-New York), who introduced the most active TRIA legislation, is resisting such changes.
In response, House Republicans created a standalone bill they hope will force the Senate’s hand by passing TRIA with their Dodd-Frank changes, according to Politico. The House Rules Committee posted TRIA bill language yesterday as well.
Some fear the move could jeopardize TRIA re-authorization,
which would adversely affect
workers’ compensation and other commercial insurance.
As I wrote about in previous blogs, without passage, workers’ compensation faces financial liabilities because it must cover work-related terrorism exposure, which could result in premium increases in states where the unthinkable occurs.
No passage will also make other types of commercial insurance, including property coverage, much more expensive and difficult to obtain. As I covered in Actuarial Review, terrorism insurance is difficult to price because there have been few terrorist events on American soil (thank God) and future terrorism treats are difficult to anticipate.
No TRIA also means no Super Bowl because game organizers will not be able to obtain affordable terrorism coverage, according to BusinessWeek. The NFL has joined with other professional sports leagues and 80 business groups nationwide to form the Coalition to Insure Against Terrorism (CIAT) to urge Congress to reauthorize of TRIA legislation.
Not everyone is a fan of TRIA re-authorization. Conservatives view TRIA as a waste of taxpayer dollars. In a recent National Review blog, writer Mark Calabria called TRIA “no more than corporate welfare wrapped up in the flag.”
Given the growing terrorism risks due to ISIL and other terrorist organizations, passing TRIA makes total sense. My hope is enough lawmakers agree.