(Washington, DC) - U.S. Rep. Gary Ackerman (D-NY), a senior member of the House Financial Services Committee, along with the Committee’s Chairman Rep. Barney Frank (D-Mass), today moved through the House, a revised bill to renew the Terrorism Risk Insurance Act (TRIA). The measure includes several important provisions that were contained in the original House-passed bill but not included in the Senate-passed version of the legislation.

These measures include the “reset language” which lowers deductibles and triggers after a catastrophic terrorist attack, group life insurance and a lower level at which TRIA kicks-in (to $50 million as opposed to $100 million in the Senate version).

Ackerman, along with Frank, have championed TRIA’s renewal both in the committee and in the full House. The bill passed by a vote of 303-116.

The following is the statement Ackerman made on the floor of the House during debate of the measure:

“Mr. Speaker, it has been almost a year since the Financial Services Committee began the process of reauthorizing the Terrorism Risk Insurance program. It has been nine months since our committee held a field hearing in New York City at which we heard experts, insurers, developers and reinsurers testify that the private market for terrorism insurance has not grown enough since 9/11 to sufficiently meet demand in many of our nation’s so-called high-risk areas.  It has been over four months since we held both a subcommittee and a full committee markup and almost three months since the House overwhelmingly approved H.R. 2761 – a strong reauthorization that would have extended TRIA for 15 years, provided group life coverage, as well as nuclear, chemical, biological and radiological coverage, and significantly lowered the program’s trigger level.  Most importantly of all, and after constructive negotiations and compromise with the Minority, the House bill included a reset mechanism to address increased capacity shortages following major terrorist attacks, such as those that may occur anywhere in our country.
         
And yet, despite a proactive, bipartisan effort in the House spearheaded by Chairman Frank and Ranking Member Baucus, we find ourselves in the 11th hour; with TRIA set to expire at the end of the month, we are faced with a weak Senate bill that was deliberately sent to us only after we had recessed for Thanksgiving, effectively stalling the negotiation process between the two chambers. The Senate’s bill, a seven year reauthorization that only amends the TRIA program by eliminating the distinction between foreign and domestic acts of terrorism, simply does not provide developers, insurers and reinsurers with enough of the stability they need to plan, finance, insure and build our nation’s major development projects.
 
Mr. Speaker, for TRIA to be truly effective in addressing shortages in the terrorism insurance market, we must recognize that the market is dynamic; the terrorism insurance market behaves much differently in the wake of a terrorist attack than it does before an attack. The reset contained in this compromise bill is identical to the reset provision that was included in the House-passed TRIA extension in September, which I and Mr. Baker of the Minority came to a mutually acceptable agreement. Under those terms, which are in this compromise bill, in the event of a terrorist attack with losses of $1 billion or greater, the deductibles for any insurance company that pays out losses due to the event immediately lower to 5 percent, while the nationwide trigger for any insurer for any future event drops to $5 million.  Mr. Baker and I also reached agreement on my proposal to enable the Secretary of the Treasury to aggregate the total losses of two or more attacks that occur in the same geographical area in the same year, so that, if the total insured losses of those events are over $1 billion, the reset mechanism would be triggered. The inclusion of this language is absolutely vital to every high-risk area across the country, and many of us consider this to be the central, most essential, must-be-included aspect of this legislation.
 
My colleagues may recall that the TRIA extension passed by the House in September was subject to PAYGO concerns because the Congressional Budget Office had assessed its cost as being roughly $10 billion over 10 years. With this CBO score, some of our friends on the other side of the aisle argued that, even though no funds would have been appropriated unless our country was attacked, our bill would have been too much of a burden on American taxpayers. Not knowing who else to bill for an attack on America, I disagreed with that view, and with the CBO's scoring, but I too am committed to a fiscally responsible bill. And I am pleased to say that my fiscally conservative friends on both sides of the aisle can now vote for this bill without any hesitation. Thanks to the inclusion of language from the Senate’s bill and, more significantly, because of the reset language, this compromise legislation has been assessed a positive CBO score of $200 million. Let me say that again. The compromise bill we are debating today will result in a net gain of $200 million. Legislation that protects developers and the insurance industry from terrorist attacks and provides taxpayers with a return on their dime is something I believe we should all be able to support.
 
Mr. Speaker, the next terrorist attack against the United States, like the one on 9/11, is going to damage more than just buildings. We must acknowledge that the structural losses associated with a terrorist incident will be accompanied by the loss of human life. The legislation before the House today recognizes this fact and includes group life insurance coverage, because this Congress is concerned not only with the value of buildings, but the people inside of them as well.
 
Our bill also lowers the program trigger from that in the Senate bill, from $100 million to $50 million. Our lower trigger would prevent smaller insurance companies from being priced out of the terrorism insurance market. And, with a greater supply of insurance, we can expect a higher degree of stability for large-scale developers all over America.
 
Mr. Speaker, in the absence of a formal conference, which most of us in this body would have preferred, we have taken it upon ourselves to consider this legislation, in which we have compromised with the Senate on many of their issues, but holds firm on those provisions that we believe must be included as part of reauthorizing TRIA: the reset mechanism, group life coverage and lower triggers. I urge all of my colleagues to support this important compromise legislation, and, as the clock strikes 11:59, to place the burden of responsibility back on the broad shoulders of the United States Senate.

###

Return to Gary's Homepage