Better Late Than Never: Congress Reauthorizes TRIA

On January 8th, as anticipated at the close of the 113th Congress, the House of Representatives and Senate voted overwhelmingly to reauthorize the Terrorism Risk Insurance Act (TRIA).

In one of the first pieces of legislative business to be conducted since the convocation of the 114th Congress, the House voted 416–5 on January 7 to extend TRIA for six years. The substance of the bill is identical to the one passed in the House in December: it includes provisions to reimburse insurers for any costs above $200 million in the event of an act of terrorism. (This is double the amount provided for under the terms of the original TRIA, which expired on December 31.) At the same time, it raises co-payments on the part of those insurers from 15 percent to 20 percent.

In less than 24 hours, the Senate passed its own version of the bill by a vote of 93–4. As passed, the bill, which also reauthorizes TRIA for six years, adds several provisions. One is to remove Dodd-Frank Act restrictions so that agricultural and energy companies are exempted from the derivative regulations that banks must follow. The new TRIA legislation also provides for the establishment of the National Association of Registered Agents and Brokers (NARAB), which would allow agents and brokers to apply to a central clearinghouse, administered by state insurance commissioners, that would in turn streamline multi-state licensing.

It was an objection to that final provision on the part of now retired Senator Tom Coburn (R-Okla.) that led him to successfully block the vote on December 16, thus allowing TRIA to expire. Political observers consider the speed with which TRIA cleared both chambers of Congress to be a hopeful sign that a long-standing pattern of gridlock may be at an end. It’s worth noting, too, that while opposition to TRIA in the House was confined to Republicans, that on the Senate side was bipartisan—and saw an unlikely agreement of Senators Elizabeth Warren and Marco Rubio in voting nay.

The White House opposes the Dodd-Frank exclusion, but there is no indication that a veto is in the offing. Look for President Obama to sign the TRIA reauthorization, then, when it reaches his desk.

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