Senators strike deal on terrorism insurance extension

A bipartisan group of senators has struck a deal to extend a government insurance program for terrorist attacks.

Under the proposal, the Terrorism Risk Insurance Act (TRIA) would be extended for another seven years, but private companies would shoulder a larger share of the costs if a terrorist attack occurred, according to an aide familiar with the deal. The program is set to expire at the end of  the year.

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Sen. Charles SchumerCharles (Chuck) Ellis SchumerCan Mueller be more honest than his colleagues? Throwing some cold water on all of the Korean summit optimism House Republicans push Mulvaney, Trump to rescind Gateway funds MORE (D-N.Y.) said TRIA has been "key to development" in high-risk areas like New York City and vowed to work "hand-in-glove" with Republicans to get the extension passed.

Schumer is co-sponsoring the extension alongside Sens. Dean HellerDean Arthur HellerSenate GOP wary of new tax cut sequel GOP Senate hopefuls race to catch up with Dems Family, friends mourn death of Barbara Bush MORE (R-Nev.), Mark KirkMark Steven KirkHigh stakes as Trump heads to Hill Five things to watch for at Trump-Senate GOP meeting Giffords, Scalise highlight party differences on guns MORE (R-Ill.) and Mike JohannsMichael (Mike) Owen JohannsMeet the Democratic sleeper candidate gunning for Senate in Nebraska Farmers, tax incentives can ease the pain of a smaller farm bill Lobbying World MORE (R-Neb.).

The proposal, and its bipartisan backing, could lead to a conflict with conservatives who have criticized the program as one that puts government dollars at risk, and who have been reluctant to seek an extension.

A Senate Banking Committee spokesman said the bill was a "positive step," adding that both Chairman Tim JohnsonTimothy (Tim) Peter JohnsonSenate GOP rejects Trump’s call to go big on gun legislation Court ruling could be game changer for Dems in Nevada Bank lobbyists counting down to Shelby’s exit MORE (D-S.D.) and ranking member Sen. Mike CrapoMichael (Mike) Dean CrapoLobbyist whose wife rented to Pruitt steps down Americans are set for relief from an Obama-era financial rule Watchdog files complaint GOP senator did not report fundraisers held at condo co-owned by lobbyist’s wife MORE (R-Idaho) want to advance it in the coming weeks.

TRIA was first put in place in the aftermath of the Sept. 11 attacks in 2001, and has twice been extended by Congress.

In a September hearing on the program, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said the program was originally intended to help insurance companies recover from the attacks, but it has only grown in scope with each extension. He said he had an open but skeptical mind on another extension.

At the same time, he noted that several of his GOP colleagues, such as Rep. Michael Grimm (R-N.Y.), have been adamant about the need for another extension. Grimm has sponsored a five-year extension of the program, and a 10-year extension has been offered by Rep. Michael Capuano (D-Mass.).

Rep. Maxine Waters (D-Calif.), the top Democrat on Financial Services, praised the senators for coming to an agreement, while chastising Hensarling for not bringing up an extension yet.

"In the Financial Services Committee, there are two pieces of legislation that would achieve these goals by cleanly extending TRIA over the long-term. Both have bipartisan support and both could pass the Committee today," she said in a statement. "It seems some may understand that TRIA must remain in place to ensure a speedy recovery after an attack, to avoid market disruptions, and to protect schools, jobs and businesses."

 

 

 

Ensuring the program continues has been a top priority for a host of major businesses and industry groups, which have formed a coalition solely devoted to pushing an extension. Major banks, sports leagues and hotel chains have joined the group pushing for an extension of that backstop.

According to the aide, the Senate proposal would include two changes that would be phased into the program over five years.

Currently, the government covers 85 percent of losses in a terrorist attack up to $100 billion, with insurance companies covering the other 15 percent. The government support kicks in once insurance companies have exhausted their deductibles.

The Senate proposal would drop government support to 80 percent of losses, requiring insurance companies to pick up 20 percent of the costs.

The new plan would also require the government to recoup costs from the industry in the event of costlier attacks. Currently, the government is required to recoup its costs if the losses suffered by insurance companies do not exceed $27.5 billion (the Treasury Secretary has the power to recoup costs above that, but it is not mandatory).

Under the new bill, that threshold would climb to $37.5 billion.

This post updated at 2:00 pm and 2:53 pm.