Business groups are bracing for another battle against Rep. Jeb Hensarling (R-Texas) in the lame-duck session over reauthorizing an insurance program designed to help businesses recoup losses after terrorist attacks.
Unless Congress acts, the Terrorism Risk Insurance program (TRIA) enacted after the Sept. 11, 2001, attacks will expire. The law, pitched in 2002 as a temporary program, allows the government to shoulder the costs of insurance payouts after a large-scale terrorist attack.
{mosads}Hensarling and other conservatives are skeptical of government involvement in the insurance industry. They argue that Congress should begin lessening its footprint in the market, in part by increasing the threshold for which the government is responsible for fronting the costs following a terrorist attack. The current trigger is $100 million. The House bill increases that to $500 million, which industry groups say is too high.
People on both sides of the fight expect Congress to approve some kind of extension of the program in the post-election session.
But the insurance industry is worried Hensarling will only agree to a short-term extension of the program that would last for six to nine months. That could allow the program to be killed off in the next Congress, if lawmakers decide not to extend it further. It could also create uncertainty in the industry.
A short-term extension of the insurance program would echo the House GOP’s handling of the Export-Import Bank, which Hensarling also opposed. In September, the House approved a short-term extension of the bank’s charter that expires in May.
Sources worried that a similar move will be made on terrorism insurance note that Hensarling will have leverage.
The Financial Services chairman is seen as a potential rival to Speaker John Boehner (R-Ohio) and other members of leadership. Industry sources worry GOP leaders might want to avoid a fight with Hensarling, as they are preparing for House leadership elections.
“Leadership has no idea how this is going to play out,” said one insurance industry lobbyist working closely on the issue. “If Jeb Hensarling were not in Congress, a bill would’ve passed with enormous support.”
Hensarling has signaled he’s willing to strike a deal and negotiate a reauthorization, but the industry is worried he’ll want a short-term deal.
A Hensarling spokesman declined to comment for this story. Boehner’s office didn’t respond to a request for comment.
The Senate passed a seven-year TRIA reauthorization bill backed by the business community in a 93-4 vote in July.
Hensarling reluctantly supported a five-year TRIA reauthorization bill approved by his panel in June. The legislation wasn’t supported by the business community, however, and House Republican support for the bill deteriorated so it was never brought
to the floor.
“We have a diverse Republican caucus in the House,” Hensarling said in a statement when the Senate bill passed in July. “Washington is paying a lot of attention to one group’s concerns, but not enough attention to the other’s. That’s got to change if any TRIA bill is going to pass.”
The Chamber of Commerce and other business groups argue a short-term reauthorization would create economic uncertainty for businesses and insurance companies that might wonder if TRIA will eventually disappear.
“We’re confident there’s broad, bipartisan support for a long-term bill, but nobody knows how the beginning of the end will begin,” said Nathaniel F. Wienecke, a senior vice president at Property Casualty Insurers Association of America.
The Chamber has helped organize more than 400 business groups that are pushing for TRIA’s reauthorization, said Justin Lumadue, director of the Chamber’s Office of Congressional and Public Affairs.
Lumadue said that there is “substantial support” for TRIA’s reauthorization in the House.
“The reauthorization of TRIA prior to the end of the year is a major priority for the business community and the Chamber,” Lumadue said.
Business groups have also formed the Coalition to Insure Against Terrorism (CIAT), which includes dozens of stakeholders who engage in the terrorism insurance industry.
Members include the NBA, the NFL, the Financial Services Roundtable and Hilton Worldwide.
“Congressional leadership and the administration have said that TRIA is a must-pass item this year and we agree,” said Martin DePoy, CIAT steering coordinator. “In the coming weeks, the Coalition will be doing everything possible to ensure the longevity of this important program.”
Congress reauthorized TRIA in 2007 on a seven-year reauthorization bill that passed with broad, bipartisan support.