How do you get the “least productive” Congress to speed up its fight over terrorism insurance?
The Terrorism Risk Insurance Act is set to expire at the end of this year unless Congress reauthorizes the legislation. Those concerned that terrorism risks remain high feel pressure to ensure that a government backstop remains, but that means getting Congress to agree on something way ahead of deadline.
TRIA was enacted in 2002 as a response to the 9/11 terrorist attacks. It’s a public-private partnership that requires private insurance companies to provide terrorism risk coverage, with federal funding as a backstop if costs to insurance companies exceed $100 million. The law was renewed in 2005 and 2007.
Experts and lawmakers agree that the nature of terrorism risk insurance raises a unique set of concerns and time frame for the debate.
“We hear a lot that [TRIA] doesn’t expire until the end of December. In reality, people are making decisions now on new projects,” Rep. Randy Hultgren said Monday at a National Journal Live event underwritten by Zurich. “It doesn’t help us at all to get closer to that date.”
“The uniqueness of this, the risk of this, the uncertainty is unlike everything else,” the Illinois Republican continued. “It hurts that the congressional approval rating is so low. We have to get to the point that people trust us, that we’re going to do our homework and make good decisions.”
Hultgren supports a renewal of the law, and emphasizes this needs to get done — and fast. But even among those who believe the law should be extended, debate persists over the details and the extent of government funding.
Critics of TRIA argue that the law places a burden on taxpayers, and puts an undue cost on those living in rural areas with less of a terrorism threat. Some say that costs should be more heavily on the private sector, with less public involvement.
A bipartisan group of senators agreed on legislation last week that would extend the government’s terrorism risk insurance program for seven years, while raising insurer copayments from 15 to 20 percent.
Hultgren says the Senate bill is a good place to start, but that there are a number of other proposals that should be considered as well.
There was hope that these discussions would be further along at this point, but an extension should be passed by the summer, Hultgren said. The congressman said he hopes lawmakers will take up further considerations as soon as they return from their April break, and have a bill to the committee in the first few weeks of May.
“The hope is that we’ll really get this done by the summer; it’s so important to get this out of the way by August break,” Hultgren said. “I get the sense even people who are not in total agreement of how it’s going to work recognize that timing is important and we have to get moving.”