A move to reauthorize the federal backstop for terrorism insurance has gained ground, with the Senate's July 17 approval of a seven-year extension. But House Financial Services Committee Chairman Jeb Hensarling (R-Texas) criticized the Senate bill and said resolving the issue will take months.
Industry officials want Congress to extend the Terrorism Risk Insurance Act, or TRIA, before it expires on Dec. 31. Jeffrey D. DeBoer, Real Estate Roundtable CEO, said that, if TRIA lapses and commercial real estate owners lack terrorism coverage, it would lead to delays in construction, sales, purchases and refinancing. Uncle Sam now covers, after deductibles, 85% of insurers' losses from a terrorist act above $100 million. The Senate bill pares the federal share to 80%.
Hensarling's panel passed a five-year TRIA bill on June 19. It would trim the federal share and hike the loss threshold to $500 million, except for nuclear, chemical, biological or radiological attacks. Hensarling said he's committed to passing a bill but says it will be "several more months before there is a resolution."