(Washington, DC) - Under the leadership of U.S. Rep. Gary Ackerman (D-NY), a senior member of the House Financial Services Committee and the Committee’s Chairman Rep. Barney Frank (D-Mass), the House of Representatives today passed the Senate bill to renew the Terrorism Risk Insurance Act (TRIA), a measure critical to the rebuilding of Ground Zero and other sites attacked by terrorists.

In addition to the passage of TRIA, Ackerman today introduced the Terrorism Risk Insurance Improvement Act which would add the “reset mechanism” to the TRIA program. The “reset mechanism” lowers deductibles and trigger levels for those insured sites already hit by a terrorist attack. The “reset mechanism” is a critical item for TRIA since the provision would allow Ground Zero or any other site attacked by terrorists for a second time to be able to obtain terrorism insurance.

Today’s vote to extend TRIA was approved overwhelmingly. The bill renews TRIA for seven years, extends coverage for domestic terrorist attacks (in addition to the existing foreign attack coverage) and contains the same damage level of $100 million at which TRIA kicks-in.

Ackerman and Frank have championed TRIA’s renewal both in the committee and in the full House. TRIA expires in less than two weeks on December 31 of this year.

“Although the House bill to extend TRIA was stronger than the Senate version, I am pleased that this vital program will be renewed for seven years rather than another short-term extension of two or three years” said Ackerman. “However it is disappointing that Congressional Republicans and the White House, whose rhetoric is so tough on terror, missed an opportunity to stand-up to terrorists by not adopting the best possible TRIA bill. However we are confident that our legislation to include the “reset mechanism” in TRIA will be enacted at some point, whether under this administration or the next.”

In addition to the “reset mechanism” the House version to renew TRIA also included several provisions not contained in the Senate measure. They included a longer extension of 15 years, group life insurance, the requirement of nuclear, biological, chemical and radiological coverage and a lower damage level of $50 million at which TRIA kicks-in.

After the 9/11 attacks, many insurance companies eliminated terrorism insurance from their policies, judging the potential losses from a major terrorist attack to be too great to insure against. In response, Congress passed TRIA, which created an insurance backstop from the federal government to protect against catastrophic terrorism-related loses. The measure was extended for two years in 2005 and expires this December 31.

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The following are the remarks Ackerman made on the House floor today in support of TRIA during debate on the program’s renewal. Ackerman managed the debate for the Democratic side.

“Mr. Speaker, the legislation before us today, the Terrorism Risk Insurance Revision and Extension Act with Senate amendments, is not the outcome that most of us in the House, on both sides of the aisle, wanted. In September, after a series of subcommittee and full committee hearings, a field hearing, and following both subcommittee and full committee markups, the House overwhelmingly passed H.R. 2761 by a strong bipartisan margin of three-to-one. H.R. 2761 would have extended TRIA for 15 years; it would have eliminated the distinction between foreign and domestic acts of terrorism; it would have included coverage for group life and for nuclear, chemical, biological and radiological, so-called NCBR attacks. Most importantly, H.R. 2761 included a “reset mechanism,” which would have addressed the types of increased capacity shortages that we have already seen follow major terrorist attacks against our country. I want to be clear about this: The reset mechanism is not a New York provision. In negotiations with Mr. Baker of the Minority, we worked out that the reset mechanism would be triggered by any future catastrophic attack any place in America. Under the rest, if, Heaven forbid, our country does suffer another catastrophic attack, the nationwide trigger would be reset and the nationwide deductible for any insurer that pays out losses related to that attack would be reset at lower levels. God willing, New York will never be hit a second time, and, God willing, your state will never suffer a catastrophic attack like 9/11. But if it does, then you, too, would enjoy the so-called “benefit” of the reset mechanism.

Let’s take Alabama, for instance, that fought so hard for, and received, $130.5 million in Homeland Security grants because it is at risk of an attack by terrorists. God forbid terrorists blow up the Medical Center at the University of Alabama at Birmingham. Under this legislation, you will be covered. Without a reset, however, after a catastrophic attack, the supply of terrorism insurance could be so scarce that you may not be able to rebuild the Medical Center, which was in Birmingham. In short, the House bill, which included the reset, would have met the needs of our country, and would have prepared the nation to better cope with some of the grave financial issues that would arise if there is another terrorist attack on our nation.

Mr. Speaker, when the House passed H.R. 2761 in September, we presented the Senate with a historic opportunity to protect our Homeland from some of the economic consequences of terrorism and specifically, to safeguard the developers, insurers and reinsurers who will bear the highest financial burden if our nation is attacked again. The financial stability of these industries is a cornerstone for our economy, and they are absolutely essential to our capacity to recover from an attack. Sadly, the U.S. Senate didn't seize the opportunity to protect our nation and our markets. Instead, our colleagues on the other side of the Capitol opted to amend our bill, to extend the TRIA program by only seven years – less than half of our extension period – and to strip out every beneficial provision in our bill save one. The Senate accepted the House’s position that the distinction between foreign and domestic acts of terror in today’s world is often impossible to discern. Having passed a hollow shell of a bill, and having done so only after the House had adjourned for Thanksgiving, our Senate counterparts abandoned the legislative process and have refused to go to conference.

Faced with the choice between accepting a bad bill and disrupting U.S. financial markets, the House went to work again, Democrats and Republicans, to try to find a compromise with the Senate and, last week, we passed a limited, but still much improved TRIA reauthorization. The compromise legislation the House overwhelmingly passed last week acquiesced to the Senate’s position on duration as well as coverage for nuclear, biological, chemical, and radiological coverage; the compromise bill would have accepted the Senate’s extension of TRIA for only seven years and elimination of NCBR coverage. The House held firm, however, to the provisions we felt were absolutely necessary to allow for large-scale development to continue across the country: the inclusion of a reset mechanism, group life insurance coverage, and lower program triggers.

Mr. Speaker, the House overwhelmingly passed the compromise TRIA reauthorization last week and the Senate, as has been so often been the case this year, did nothing. And so today we are faced with a difficult reality: we can either accept the Senate’s shell of a bill--and ensure that our nation’s economy is protected against terrorist attacks--or we can let the program expire in less than two weeks. Maybe that's considered good government in some parts of the country, but entrusting our nation's economy to the terrorist roulette wheel would not be acceptable to the American people, and it is not acceptable to the House, and we must do the responsible thing.

The Senate amendments to H.R. 2761 are unhelpful, short-sighted, and represent an unrealistic, pre-9/11 outlook. The Senate amendments come from a naive world where there is no real risk of terrorism, and another attack like 9/11 is impossible. In the Senate’s mythical world, developers build stadiums, malls and national landmarks without funding, banks lend money without insurance, insurers underwrite policies regardless of risk; and reinsurers do the same, but on a yet more massive scale. In the Senate’s fantasy world the $30 billion in insured losses from 9/11 can be easily underwritten and capitalized, because unimaginable losses, such as those that would come from an attack with weapons of mass destruction just can't happen. And the reason they can't happen is because the U.S. Senate said so.

Unfortunately, Mr. Speaker, Santa Claus is not going to give America terrorism risk insurance for Christmas and we don't live with the Easter bunny in the Senate's candy-land, where catastrophic risk can be comfortably ignored. Saying "the market will provide" doesn't make it true. In the real world, it is critical to both our national security and to our economy that there is no gap in terrorism risk insurance. This House will not leave our nation's developers, insurers and reinsurers out in the cold when we adjourn for the year. I therefore urge all our colleagues to support this legislation out of the necessity to extend the TRIA program past its expiration date, and with the understanding that this fight is not over.

We will continue to advocate for those provisions that we know are critical to securing our homeland against terrorist attacks, namely: the reset mechanism, group life coverage, lower program triggers and NCBR coverage. To this end, I have just introduced legislation entitled the “Terrorism Risk Insurance Improvement Act” that will add the reset mechanism to the TRIA program we are about to reauthorize here today, and I invite all of our colleagues to join me as cosponsors. We will continue to fight for fully effective TRIA program until the Senate and the White House get the memo that the War on Terror is not only fought on the other side of the world, but on the home front, as well.

Mr. Speaker, I reserve the balance of my time.”

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