Two days after the Bush Administration said it would veto an extension of the Terrorism Risk Insurance Act (TRIA), the U.S. House of Representatives passed a bill that would extend the program through 2022.
Passed by 312 to 110 with bipartisan support, the Terrorism Risk Insurance Revision and Extension Act would also expand what is covered by the government-backed insurance program. It was first passed after the September 11, 2001, attacks to protect against terrorism-related losses, then renewed in 2005 and set to expire at the end of 2007.
Under the current law, the government grants partial compensation for insured losses in the case of a terrorist attack. The bill the House passed Wednesday would extend that coverage for the next 15 years and expand the scope of coverage to include insured losses from domestic-engineered attacks and nuclear, biological, chemical, and radiological acts of terrorism, which the current law excludes. The bill would also reduce the trigger point for coverage from $100 million to $50 million.
According to a statement released Monday by the White House, President Bush will veto the bill if it is presented to him with such provisions. The Administration also believes the program itself should be phased out to allow a private market for terrorism insurance to develop. “TRIA was intended to provide a temporary mechanism to allow the marketplace to adapt in the short run after economic dislocations resulting from September 11,” the statement said.
Supporters of the bill, including a number of business and insurance groups, argue that there is not a sustainable private insurance market that could offer the protection TRIA has provided for the past five years, and therefore it should be extended. In a statement, bill sponsor Rep. Mike Capuano (D-Mass.) said: “TRIA has helped make terrorism insurance available and affordable to businesses, particularly those in our major urban areas. Improving and extending this program will help spur America’s continued economic development by providing certainty that terrorism insurance will be available for years to come.”