Moving just days after committees in the House and Senate advanced terrorism insurance bills, the full U.S. Senate today passed its version of the Terrorism Risk Insurance Extension Act of 2005 (S. 467).
By a voice vote, the Senate approved a new, two-year program to take the place of the Terrorism Risk Insurance Act of 2002, which expires Dec. 31.
Similar legislation to extend the program has passed a House committee but must still be voted on the floor of the House of Representatives. After approval there, House and Senate negotiators would have to come up with a compromise.
According to the American Insurance Association, the Senate action is good news for the insurance industry.
“We are encouraged by the Senate’s swift and broadly bipartisan action,” said Leigh Ann Pusey, AIA senior vice president, government affairs.
The National Association of Realtors also welcomed the Senate action.
“Terrorism insurance is critical to financing commercial real estate development, particularly in densely populated areas that are perceived to be terrorist targets,” said NAR President Thomas M. Stevens, senior vice president of NRT Inc., from Vienna, Va. “This legislation will ensure that the overall sense of economic and employment security that TRIA has brought will continue. If the Terrorism Risk Insurance Act were allowed to expire, the resulting disruption would complicate the financing of numerous commercial real estate properties, impede the development of large scale commercial and residential development and leave large sectors of the economy uninsured in the event of a terror attack.”
Many Republicans, the Treasury Department and the White House have urged Congress to limit the federal government’s role in any terrorism insurance program. However, the bills have achieved bipartisan support and the Bush Administration has said it could support the Senate version.
Both bills would, however, raise the event size that triggers federal aid from the current TRIA’s $5 million to $50 million in the first year of its extension and $100 million in the second year.
The Senate bill also would eliminate some lines of insurance coverage such as group auto. The House version would add group life, a step opposed by the Administration.
Treasury Secretary John Snow said he supports the Senate approach, while he continued to push for a limited government role.
“I’m pleased to see that actions today in the Senate to extend the Terrorism Risk Insurance Act recognize the temporary nature of the program and place terrorism insurance on the right path to full private market participation,” Snow said in a statement.
“As Congress proceeds on legislation to extend TRIA, we will continue to work with both the House and Senate to ensure the program entails greater participation of the private market and less risk for taxpayers.”
AIA’s Pusey urged that House Financial Services Committee Chairman Michael Oxley (R-OH) and House leadership bring legislation to the floor as quickly as possible.
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