On Tuesday, June 3, the Senate Banking Committee held a mark up hearing of S. 2244, Senator Schumer’s Terrorism Risk Insurance Act (TRIA) reauthorization bill. In a strong showing of support, the bill was unanimously approved by the Committee. NAR sent a letter of support for the bill to all the members of the Committee, and urged those Senators who had not already to cosponsor it. Along with Senator Schumer (D-NY), this bipartisan bill has original cosponsors Senator Heller (R-NV), Reed (D-RI), Kirk (R-IL), Murphy (D-CT) and Johanns (R-NE). Unless TRIA is renewed, the program will expire at the end of 2014. S.2244 would renew the federal Terrorism Risk Insurance Program for seven years, while reducing the government’s risk by increasing the mandatory recoupment amount (from $27.5 billion to $37.5 billion) and reducing the government’s share of the coinsurance amount from 85% to 80%.
The next step in the TRIA renewal process will be for S.2244 to be voted on the Senate floor. Over in the House, it is expected that the House Financial Services Committee will introduce its reauthorization bill, authored by Representative Randy Neugebauer (R-TX), in mid-June, with the expectation that it will be marked up before the July 4th district work period. The earlier that TRIA is reauthorized the better, as many insurance policies that extend past the end of 2014 are including “springing exclusions” now, which state that if TRIA is not reauthorized, the policy will not include terrorism risk insurance past December 31st, 2014. The unanimous approval in the Senate Banking Committee is hopefully a good sign.