Rep. Randy Neugebauer (R-Texas) introduced legislation on Tuesday that would reform and extend the Terrorism Risk Insurance Program without changing its critical functions.
The Terrorism Risk Insurance Act (TRIA) was signed into law following the September 11, 2001, terrorist attacks to prevent the limited availability of terrorism insurance available on the market from hampering economic development. The proposed TRIA Reform Act seeks to modernize the Terrorism Risk Insurance Program without altering its core functions.
“Over the past decade, the terrorism risk insurance marketplace has modernized and advanced,” Neugebauer, the chairman of the House Financial Services Subcommittee on Housing and Insurance, said. “Now is the time for Congress to take off the training wheels and transition to a terrorism risk insurance market that is less dependent on a taxpayer-funded backstop. The TRIA Reform Act of 2014 will lay the foundation for a more robust private market that protects American families from writing yet another blank check to yet another Washington program.”
The bill would transition to a new program trigger of $500 million for terrorism events that are not nuclear, chemical, biological or radiological. It would also decrease the federal share of insurers’ losses from 85 percent to 80 percent.
“This bill is the result of a year-long effort by my subcommittee, which included multiple hearings, many member-level discussions and dozens of meetings with stakeholders – from policyholders, insurers and reinsurers, to commercial lenders, realtors and securitizers,” Neugebauer said.
The bill would also extend the Terrorism Risk Insurance Program for five years.