U.S. Senate begins process to advance reauthorization of the Terrorism Risk Insurance Act (TRIA)

Today, the Senate Banking Committee voted 22-0 to advance S. 2244, a bipartisan bill supporting the reauthorization of TRIA. The legislation would (1) extend TRIA for a period of seven years; (2) phase in over five years an increase in insurers’ co-pay from 15 to 20%, with the government still covering 80% of each company’s additional losses; and (3) raise the mandatory recoupment threshold to $37.5 billion, so that when the insurance industry’s aggregate uncompensated losses are below $37.5 billion the government will be required to recoup its TRIA payments outlaid to insurers. The bill moves next to the Senate floor for debate and a vote by the full Senate is expected prior to August.

The House is expected to introduce a separate version of a bill to reauthorize TRIA in the very near term. That bill will go through a similar process as the Senate, where it first is approved by the House Financial Services Committee and then debated and adopted by the full House. The House will either pass its version, which will then need to be compromised with the Senate version, or simply take up the Senate bill. Either way, both the House and Senate will need to pass identical legislation for the proposal to become law. Most observers do not expect the final TRIA bill to be passed and sent to the President for signature until September at the earliest. NAPSLO will continue to provide updates as TRIA reauthorization progresses.