But Act doesn't win approval from Bush administration
The US House Financial Services Committee has passed the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA) by a vote of 49 to 20.
But in a statement issued after the vote, Treasury Assistant Secretary for Financial Institutions David G. Nason said “we strongly oppose the bill.”
The Financial Services Committee said the legislation would extend the Terrorism Risk Insurance Act (TRIA) for fifteen years and help spur the further development of a private market for terrorism risk insurance.
According to the Financial Services Committee, TRIREA will include provisions to:
• Extend TRIA for 15 years with current co-payments and deductibles for conventional terrorism acts
• Expand TRIA’s “make available” requirement to include NBCR coverage
• Change TRIA’s definition of terrorism to include acts of domestic terrorism
“Today's effort to extend TRIA does not meet these standards for an improved market and we strongly oppose this bill
Treasury Assistant Secretary for Financial Institutions David G. Nason
• Set the program trigger at $50m
• Add group life insurance to the lines of insurance for which terrorism coverage must be made available
• Decrease deductibles for terrorist attacks over $1bn and decrease the trigger after such events
Commenting on the Act, Nason said: "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.
He added: "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.
"As the bill moves through the legislative process, the Administration looks forward to working with the Congress to pursue an improved TRIA."