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Today the U.S. Senate followed the House and voted overwhelmingly to reauthorize the federal terrorism reinsurance program that had been allowed to lapse. The vote was 93-4 in favor.
On Wednesday, the House of Representatives had voted 416-5 to renew the Terrorism Risk Insurance Act (TRIA) for six years.
President Barack Obama is expected to sign the bill (H.R. 26) into law.
The last session of the Senate in 2014 let the program expire on Dec. 31, after 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.
In addition to the terrorism insurance extension, the bill includes a provision to amend the Dodd-Frank Act to exempt agricultural and energy companies from having to post collateral for swaps traded directly with banks. During today’s Senate consideration, Sen. Elizabeth Warren, D. Mass., offered an amendment to strip the Dodd-Frank language from the TRIA bill but her amendment failed to get the 60 votes necessary, with only 31 senators backing it.
The TRIA legislation also includes the National Association of Registered Agents and Brokers (NARAB II) provision intended to streamline insurance producer licensing that Sen. Coburn opposed last year.
Also, the bill has a provision requiring that the Federal Reserve have at least one community banker among its governors.
Only five members in the House, all Republicans, voted against the extension of TRIA. They were Reps. Justin Amash (Michigan), Walter Jones (North Carolina), Thomas Massie (Kentucky), Tom McClintock (California) and James Sensenbrenner (Wisconsin).
Majority Leader Mitch McConnell said Wednesday after the House voted that the Senate would act on TRIA “quickly as well.”
In the Senate, only four senators voted against the bill: Sens. Maria Cantwell, R. Wash; Marco Rubio, R.-Fla.; Bernie Sanders, I.-Vt.; and Elizabeth Warren, D.-Mass.
Congress first passed TRIA after the terrorist attacks of Sept. 11, 2001, as a way to encourage insurers to provide coverage on New York City buildings.
In addition to reauthorizing the TRIA program for six years, the bill raises the trigger amount needed in total losses before the TRIA program kicks in from the current $100 million to $200 million, over five years, beginning in calendar year 2016. Also over five years, starting Jan. 1, 2016, the mandatory recoupment rises from $27.5 billion to $37.5 billion, increasing by $2 billion each year. For all events, the bill raises the private industry recoupment total from the current 133 percent of covered losses to 140 percent of covered losses.
The TRIA renewal has been sought by the insurance, real estate and financial industries.
The Financial Services Roundtable (FSR) was among the groups pleased with the vote today. “We applaud a strong collaborative effort by Congress to pass this bipartisan legislation critical to taxpayers and our national economy,” said FSR President and CEO Tim Pawlenty. “We hope this paves the way for more bipartisan work in Congress and that President Obama will sign the bill quickly into law.”
Insurers were also pleased.
“The Senate’s overwhelming bipartisan vote today following yesterday’s nearly unanimous House vote and the anticipated swift signing of H.R. 26 by the President assures the markets that the terrorism risk insurance program will remain in place protecting our nation’s economy, policyholders and taxpayers. Congress’ timely reauthorization of TRIA will preserve a well-functioning private terrorism insurance marketplace,” said Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), after today’s Senate vote.
“Today’s vote by the Senate will help ensure that millions of Americans will continue to have needed insurance coverage for terrorism losses at affordable rates,” said Charles M. Chamness, president and CEO of the National Association of Mutual Insurance Companies (NAMIC).
“The Big ‘I’ is proud that all our hard work on TRIA and NARAB II has come to fruition and will benefit thousands of small businesses and insurance consumers across the country,” said Bob Rusbuldt, Independent Insurance Agents and Brokers of America (Big “I”) president and CEO. “Today’s bipartisan action by the Senate on both TRIA and NARAB II, in one of the first acts of the new Congress, represents a culmination of years of hard work of the Big ‘I’ and our small business members, and I offer our members a sincere and heartfelt congratulations. Long awaited reform on non-resident licensing for agents is finally coming.”