Clock is ticking on terrorism insurance

Lawmakers are running out of time to extend an insurance program that provides a financial backstop against the threat of a catastrophic terrorist attack.

Congress left town this week without renewing the Terrorism Risk Insurance Act (TRIA), a program enacted after the Sept. 11 attacks that is set to expire at the end of the year.

With lawmakers not scheduled to return to Washington until mid-November, the program is coming perilously close to an expiration date that business groups contend would be disastrous for major cities, amusement parks, sporting leagues and other potential terrorist targets.

{mosads}“There’s an understanding of the program, and the need to get it done,” said Marty DePoy, spokesman for a business coalition backing an extension. “This uncertainty results in business having a difficult time planning for their futures. … Without this, they have a hard time figuring out how to do that.”

Business groups and corporate lobbyists are gearing up for a major push to save the program, and plan to meet lawmakers upon their return to the Capitol with a straightforward message: Renew it, and renew it now.

The desire to see the insurance reauthorized has only been strengthened by the emergence of the Islamic State of Iraq and Syria (ISIS), a radical group that has beheaded Americans and is seeking a foothold in the Middle East.

An extension of TRIA has been held up for months by fighting between the House and Senate over how long to renew the program for, and what changes — if any — should be made to it.

Business groups have made saving the program a top priority, calling it “vital for our nation’s economic security.”

“Without the backstop that TRIA provides, the private insurance market would simply be unable to provide adequate levels of terrorism risk insurance,” wrote several business groups, including the U.S. Chamber of Commerce, in a letter to Congress earlier this month.

Supporters of the insurance program are focusing most of their attention and energy on pressuring the House.

Many Republicans, wary of a government backstop for private business activity, are pushing changes that would require private insurance companies to cover more costs in all but the most damaging of attacks. Some of them are looking to line up support behind a five-year reauthorization of the measure.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Rep. Randy Neugebauer (R-Texas), the lead sponsors of the House bill, plan to spend the next few weeks lining up support for their bill in hopes of reaching a deal with the Senate by the end of the year.

Hensarling’s panel advanced a bill back in June, but the measure has yet to reach the floor, with backers still working to win over skeptical Republicans.

The House Financial Services Committee approved its insurance measure in a party-line vote, but it is not clear whether it would have enough support to pass the full House.

Rep. Peter King (R-N.Y.), for example, backed the bill out of committee, but is prepared to vote against it on the floor, favoring a clean extension.

Still, while no Democrats voted in favor of the bill at the committee level, there will be some moderate and business-friendly Democrats who will feel pressure to support some sort of extension before the year is out.

The situation is clearer in the Senate, where Democrats passed a seven-year extension of the program in July, with 93 senators voting in favor. Backers there, like Sen. Charles Schumer (D-N.Y.), have called for the House to take up their proposal.

Prominent House Republicans have made clear that they agree the program should continue. But they have also dug in against extending the program — originally described as temporary in the wake of the Sept. 11 terrorist attacks — without alterations.

“It’s going to get extended. The question is, do you do reforms now and negotiate, or do you just do a short-term extension into next year and then negotiate reforms?” said Rep. Paul Ryan (R-Wis.) on Thursday. “You will not see just a straight current law extension.”

Many in the insurance industry would like to see the program continue with as few changes as possible. But with time running short and members on the campaign trail until November, the priority is beginning to shift towards simply ensuring that the program survives.

The Senate bill makes some modest tweaks to TRIA that could require insurance companies to shoulder a heavier load in case of terrorist attacks.

The proposal in the House goes further by distinguishing between two types of terrorist attacks. Damages caused by a nuclear, biological, chemical, or radiological attack would be covered under the program if damages exceed $100 million, which is the current threshold. But the House plan would separate out other types of attacks, such as bombings, and require damages in excess of $500 million before the government would step in.           

How much success Hensarling and others find in rallying support to their bill will be a key factor determining what legislation moves forward.

But it might be the outcome of the November election that has the biggest impact.

One industry lobbyist said that if Republicans win control of the Senate, House conservatives would double down on the changes to TRIA, given the potential for passing a new bill through a GOP-led Congress.