House Passes TRIA Extension

The House has passed a two-year extension of a federal terrorism reinsurance program by a 371-49 vote that is structurally different and covers more lines of insurance than a Senate-passed bill.However, House and Senate conferees will have only a short time to resolve these differences before the terrorism insurance program expires at the end of the month. The House bill provides a federal backup for group life insurance and property insurance to cover losses due to nuclear, biological, chemical, and radiological attacks. It also creates a private/public commission to study how a private solution to the terrorism insurance problem could be designed to reduce the government's role. The Senate bill does not include those provisions, and Senate Banking Committee Chairman Richard Shelby, R-Ala., is insisting on a simple two-year extension that increases property-and-casualty insurers' exposure to possible losses. Industry groups prefer the House bill. "The House bill is more forward thinking," said Scott Cinder, outside general counsel for the Commercial Mortgage Securities Association. "It has a couple of pieces in it that could become the building blocks for a permanent solution." But he stressed that the main objective is to make sure Congress passes an extension of the Terrorism Risk Insurance Act before it expires.