The U.S. House of Representatives voted to reauthorize a government backstop for insurers’ losses from acts of terrorism after lawmakers let the measure expire last month.
The legislation, which will extend the Terrorism Risk Insurance Act for six years, was passed by the House in a 416-5 vote in Washington today. It now goes to the Senate for a vote that would send the measure to President Barack Obama to be signed into law.
Congress first passed the backstop after the terrorist attacks of Sept. 11, 2001, when insurers said they were hesitant to sell coverage on New York City office buildings.
A House-passed bill initiated in the Senate stalled last month when Senator Tom Coburn, an Oklahoma Republican who has since retired, raised concerns over a plan to set up a regulator to supervise insurance agents and brokers.
Majority Leader Mitch McConnell said today that the Senate would need to take action on TRIA “quickly as well.”
The language of the terrorism insurance measure is the same as that approved by the House last year. The bill would reimburse insurers after industry losses reach $200 million, compared with $100 million under the expired law. It also would increase companies’ co-payments to 20 percent from 15 percent and gradually raise the threshold for government involvement.
In addition to the terrorism insurance extension, the bill includes a rollback of a Dodd-Frank Act provision that would exempt agricultural and energy companies from having to post collateral for swaps traded directly with banks. It also includes a mandate that the Federal Reserve have at least one governor position with community banking experience.
This legislation also includes the National Association of Registered Agents and Brokers (NARAB II) provision intended to streamline insurance producer licensing that Oklahoma Sen. Tom Coburn opposed.
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