House, Senate committees advance extensions to terrorism insurance coverage

The House of Representatives and Senate both recently advanced bills through committee that ensure the government will cover private losses in the event of a terrorist attack.

The House Financial Services Committee and Senate Banking Committee advanced competing versions of an extension to the Terrorism Risk Insurance Act (TRIA), signed in 2002 and extended in both 2005 and 2007. The law, which will expire at the end of this year, obligates the federal government to cover 85 percent of claims made after an attack where damages exceed $100 million, the Washington Times reports.

"It [TRIA] needs to be reauthorized as soon as possible because businesses across the country already are evaluating whether they will be able to pursue development and expansion plans if TRIA isn't reauthorized," Martin Depoy, the steering committee coordinator for the Coalition to Insure Against Terrorism, said, according to the Washington Times.

The Senate version of TRIA would keep the law largely intact, although it would increase the share of insured losses paid for by private insurers and have the government study the effects of premiums collected through the program. The Senate version would also extend the law through 2021.

The House version of the law would gradually increase the trigger for federal coverage from $100 to $500 million and create a separate trigger for CBRN attacks. That version, which would extend the TRIA to 2019, would also allow some small businesses to opt out of the requirement that they offer coverage for terrorist attacks along with commercial property and casualty insurance.