Washington, DC – After the United States House of Representatives approved the reauthorization of the Terrorism Risk Insurance Program (TRIA) on December 10th, the bill died in the Senate last night (December 16th, 2014) after soon-to-retire Oklahoma Senator Tom Coburn blocked the legislation from being called for a vote. Without renewal, the existing legislation expires on December 31st, 2014.
TRIA was enacted after the 9/11 attacks on New York City, which resulted in a majority of insurers declining to write coverage on buildings in NY due to the threat of future attacks. The bill, similar to Flood Insurance through FEMA, provides governmental assistance on systemic, multi-industry losses – in TRIA’s case: terrorism-related.
Coburn’s opposition to the bill stems from a new provision that would require insurance agents and brokers to register with a newly-formed body, the National Association of Registered Agents and Brokers Reform Act (NARAB).
The Property Casualty Insurers of America (PCI) issued the following statement today, expressing concern and disappointment in the bill’s defeat:
It is unconscionable that the U.S. Senate would adjourn without finishing their job and reauthorizing a long-term Terrorism Risk Insurance Act (TRIA) when the threat of a terrorist attack against the United States is at the highest level it has been in a decade,” said David A. Sampson, PCI’s president and CEO. “TRIA plays a vital role in our national economic security. If a massive attack occurs before TRIA is reauthorized, there could be no terrorism insurance coverage or taxpayer protection. PCI is profoundly disappointed by the dysfunction in Washington and we urge the next Congress to address a long-term reauthorization of TRIA immediately when they convene in January.
Without TRIA’s backstop support, fears are wide-ranging throughout the insurance industry that insurers could face insolvency without the legislation, should a terrorist attack occur.
Even with the bill passing, many within the insurance industry are concerned with whether the legislation would address cyber terrorism or not. The bill makes no mention of “cyber,” which leaves a great deal of ambiguity. More on that HERE.
Sources: Bloomburg News, Insurance Journal, Advisen
