The House Financial Services Committee today voted to report out a bill to extend the federal terrorism insurance program for another five years. The bill also contains some reforms of the Terrorism Risk Insurance Act (TRIA) and an insurance producer licensing reform amendment.
In considering the TRIA Reform Act of 2014 (H.R. 4871) yesterday, the committee attached the producer licensing bill— the National Association of Registered Agents and Brokers Reform Act (NARAB) — to the TRIA bill. NARAB would create a nonprofit board for insurance agents and brokers to more easily obtain approval to operate on a multi-state basis.
The House committee resumed consideration this morning of the TRIA bill, introduced earlier this week by Rep. Randy Neugebauer, R-Texas, chairman of the Insurance and Housing Subcommittee. It voted 32-27 to report the bill to the full House.
The TRIA bill won reluctant support from Rep. Jeb Hensarling, R-Texas, chair of the powerful House committee, who acknowledged he does not have support for his preference for further restricting federal involvement in terrorism insurance and shifting more responsibility to private insurers.
“I assure you if I was a committee of one, this is not the bill we would be considering today,” Hensarling said at the opening of the committee session. “For those who think it goes too far too fast, I for one think it goes not very far and too slowly. At a minimum, I would also include either premiums for the free coverage that reinsurance and large companies receive courtesy of the taxpayers. Or in the alternative, increased reserve requirements to further lessen taxpayer exposure. Regrettably, I do not feel there is sufficient support for one and further work is needed on the other. Not unlike some Members of the other body, I hope that we can review this issue in the future.”
Hensarling said he would support the bill (he voted for it) because he believes it is a “reasonable set of changes to improve a needed-but-yet-still-temporary program.”
H.R. 4871 would extend TRIA for five years, increase the insurer co-pay to 20 percent, and create a new program bifurcation for nuclear, biological, chemical, or radiological (NBCR) type of attacks. The House legislation also increases the program’s trigger from $100 million to $500 million.
The House bill differs in several respects from a version passed earlier this month by the Senate Banking Committee, a version the industry appears to prefer. That bill now awaits a vote by the full Senate.
The NARAB amendment was introduced by Neugebauer and agreed to on a voice vote.
Supporters of NARAB hope to be able to attach their bill to the Senate TRIA bill as well.
This is not the first time NARAB supporters have tried to get it passed along with another bill. They nearly succeeded earlier this year in having the licensing bill attached to a flood insurance bill. The strategy didn’t work out that time as the final flood bill that passed in March was not the Senate version with he NARAB provisions but the House version, which did not contain the licensing measure.
The industry been pushing the NARAB bill or a version of it since 2006.