Seen in Insurance Journal:
The [House Financial Services Committee] voted by 49 to 20 in favor of H.R. 2761, the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA), which would extend the federal backstop for 15 years and expand it to include a controversial requirement that insurance companies make available coverage against nuclear, biological, chemical and radiological (NBCR) attacks, a provision not welcome by all insurers.[...]
The bill seeks to grow the private sector’s involvement in insuring against terrorism by lowering the event trigger. It reduces the amount of money an insurer must pay — to $50 million from $100 million — while maintaining deductibles and copayments at the present 20 percent levels.[...]
An administration response to the vote is up on the U.S. Treasury website:
“The Administration has frequently stated the need for three critical elements in TRIA reauthorization: the program should remain temporary and short-term, with no expansion and a continued increase of private sector retention. Today’s effort to extend TRIA does not meet these standards for an improved market and we strongly oppose this bill.
“We are particularly disappointed with the Committee’s decision to extend the program for 15 additional years. This extension runs counter to the public policy goal of reducing and eventually eliminating the federal government’s role in the terrorism insurance market, and it sends the wrong message to the marketplace for a program that was intended to be temporary.
One problem with TRIA being temporary—I don’t see most insurers being willing to write terror cover on their own. That’s exactly the situation where it’s appropriate for the government to enter the insurance marketplace. See, for example, the concepts behind the National Flood Insurance Program.