House Committee Advances Terrorism Insurance Bill
The House Financial Services Committee has approved a bill to extend and reform the Terrorism Risk Insurance Act (TRIA) (H.R. 4871). Specifically, the TRIA Reform Act of 2014 passed on a strict party line vote of 32-27, moving one step closer to reauthorizing the program before it expires at the end of the year.
Approved on June 20, the bill extends the program for five years and makes reforms to reduce the federal footprint and taxpayer exposure, including increasing the point at which the federal backstop is triggered from $100 million to $500 million for conventional events such as 9-11. Trigger levels remain the same for events caused by Nuclear, Biological, Chemical or Radiological (NBCR) weapons. Democratic efforts to replace the Republican measure with a 10-year extension bill were rejected.
While NAA/NMHC continue to advocate for a straight reauthorization, in a Coalition to Insure Against Terrorism (CIAT) letter we urged the Committee to move swiftly on the bill and get it to the House floor as soon as possible to ensure that terrorism insurance is both available and affordable to multifamily industry policy holders. At the same time, we cited areas of concern that we would like addressed before final enactment, such as the increase in the trigger level, the small insurer opt-out and revised recoupment mechanisms.
In contrast, the Senate Banking Committee unanimously approved a bill (S. 2244) on June 3 that would extend the program for seven years. The Senate bill maintains much of the program’s current form, including the level at which the federal backstop is triggered. It does, however, make minor changes to the risk sharing elements of the program and increases the federal recoupment amounts.
House and Senate leaders anticipate floor action in both chambers before the August recess and, if passed, the bills will need to be reconciled before the end of the year. We continue to advocate for final passage to ensure economic disruption is avoided and coverage is available and affordable for apartment owners.
Provided by NMHC as part of the NAA/NMHC Joint Legislative Program