The Senate approved legislation Thursday to reauthorize the Terrorism Risk Insurance Act, sending it to President Obama's desk after a months-long battle.
The bill to renew the TRIA program, which provides a government backstop for insurers in the wake of a catastrophic attack, was a key priority for both the insurance and banking industries. But the legislation succeeded despite earlier attempts to pass it last year that failed.
"TRIA provides an essential reinsurance backstop for insurers, allowing them to fill the need for terrorism coverage policies for our citizens and business communities at reasonable prices and with sufficient limits," James Ballentine, executive vice president of congressional relations and political affairs of the American Bankers Association, said in a statement. "Without TRIA, the private market for terrorism insurance would likely be minimal or nonexistent, particularly in metropolitan areas where coverage is needed most."
The bill was strongly supported by both Democrats and Republicans from metropolitan areas. But they had to go head to head with conservative lawmakers, particularly in the House, who preferred that the government stay out of the market entirely. The program was first created in the wake of the Sept. 11, 2001, attacks, but it has yet to be tapped for funds.
The legislation finally appeared to be moving toward passage last month. Lawmakers struck a deal to extend the program for six years and make other changes such as doubling the amount of losses that trigger the program going into effect to $200 million. But the legislation faltered in the Senate when Sen. Tom Coburn, R-Okla., blocked it over an unrelated amendment.
Yet Coburn retired at the end of the year, and the legislation passed swiftly by a vote of 93 to 4. (It had sailed through the House for a second time on Wednesday.)
Still, the renewed effort to enact the TRIA reauthorization did encounter some resistance. The bill included a separate provision eliminating swaps margin requirements — which had been mandated in the Dodd-Frank Act — for end-users such as utilities and manufacturers, sparking objections. Sen. Elizabeth Warren, D-Mass., had filed an amendment to preserve the Dodd-Frank requirement for end-users, but it failed 31-66. (Warren ultimately was among the four lawmakers voting against the TRIA bill.)
The Senate-approved bill also includes a measure requiring someone with community banking or supervisory experience to sit on the Federal Reserve Board. The bill's passage came two days after the Obama administration nominated Allan Landon, the former chief executive of the Bank of Hawaii, to the Fed board.
"While President Obama has announced his intent to nominate a community banker to the Federal Reserve Board, ICBA strongly supports this legislation so that there is always such representation on the board," John H. Buhrmaster, chairman of the Independent Community Bankers of America and chief executive of 1st National Bank of Scotia, N.Y., said in a press release.