House Approves Measure on Terrorism Risk Insurance Act
|December 13, 2007
Washington, DC - The House of Representatives today passed an extension of the Terrorism Risk Insurance Act. The legislation H.R. 4299, the Terrorism Risk Insurance Program Reauthorization Act of 2007, incorporates the entirety of the Senate amendment to HR 2761 with no changes, and adds certain provisions from HR 2761 (the original House TRIA bill) including:
- Reset Mechanism: Adds a reset mechanism for significant terrorist attacks (over $1 billion) to lower the deductibles and triggers to rebuild market capacity and then gradually increase private sector obligations over time
- Group Life Insurance: Adds group life to TRIA’s covered lines
- Creates a separate $5 billion recoupment pool for group life (property and casualty insurance retains its separate $27.5 billion recoupment pool)
- Caps the level of Federal exposure at $1 million per life under any group life insurance policy
- Lower Trigger: Lowers the trigger from $100 million to $50 million to increase capacity by encouraging small insurers to provide coverage
The Senate amendment to HR 2761 (original House TRIA bill) included the following provisions:
- Domestic Acts of Terrorism: Incorporates domestic acts of terrorism
- Duration: Extends TRIA for 7 years
- Annual Liability Cap: Clarifies the $100 billion cap; requires Treasury to provide notice to Congress and promulgate regulations regarding the cap
- Recoupment: Accelerates the timing of mandatory recoupment (recovering amounts paid by Treasury up to $27.5 billion).
- Reports: Requires GAO studies of (1) insurance for nuclear, biological, chemical, and radiological terrorist events and (2) availability and affordability of terrorism insurance in specific markets.