On Wednesday, October 16, the House Financial Services Subcommittee on National Security, International Development, and Monetary Policy and the Subcommittee on Housing, Community Development and Insurance held a joint hearing, "Protecting America: The Reauthorization of the Terrorism Risk Insurance Program." Witnesses included representatives from the National Association of Insurance Commissioners, the Reinsurance Association of America, the American Property Casualty Insurance Association, Marsh, and the Congressional Research Service.
The Terrorism Risk Insurance Program (TRIP) expires at the end of 2020 unless Congress reauthorizes it. Terrorism insurance is a vital aspect of financing for commercial real estate in many areas, and TRIP has successfully kept coverage affordable and available for commercial real estate of all sizes and types throughout the country since it was reauthorized in 2015. The 2015 reauthorization made changes to the program to reduce the federal government's exposure to risk, including increasing the "trigger amount" of losses that initiates the program, reducing the government's share in the losses amounts, and increasing the mandatory recoupment amount from insurers. During the hearing, members expressed bipartisan support for the program and its reauthorization; however there was a divide on the question of whether to have a "clean" reauthorization for several years versus a reauthorization that makes further changes to further reduce the government's risk. Those that argued against changes to the program pointed out the risk that increasing the burden on insurers beyond the changes made by the 2015 TRIP reauthorization may negatively affect the cost and availability of terrorism insurance.
NAR submitted a statement for the record for the hearing, expressing support for a long term reauthorization of TRIP which protects the access it provides for commercial properties of all sizes, in all markets, to terrorism insurance, and the importance of this program to Commercial REALTORS(R) and the economy as a whole.