Targeting Action on Terrorism Insurance

None

National Journal
Jordain Carney
Nov. 19, 2013, 4:40 a.m.

{{ BIZOBJ (video: 4580) }}

Though Re­pub­lic­an Reps. Mi­chael Grimm and Randy Neuge­bauer don’t see eye to eye on how to move for­ward with the Ter­ror­ism Risk In­sur­ance Act, they do agree on at least one thing: They want le­gis­la­tion fin­ished in the first half of next year.

Speak­ing at a Na­tion­al Journ­al event Tues­day, Neuge­bauer, the chair­man of the Fin­an­cial Ser­vices sub­com­mit­tee over­see­ing the pro­gram, said that “in a per­fect world” the ter­ror­ism in­sur­ance le­gis­la­tion would be reau­thor­ized for two to five years to al­low private in­surers time to trans­ition.

The le­gis­la­tion, ori­gin­ally en­acted in 2002, was in­ten­ded to provide a trans­ition­al peri­od for private in­surers. Al­though some in­surers have ar­gued it is hard to de­term­ine how to price ter­ror­ism in­sur­ance, Neuge­bauer said that some mod­el­ing has taken place since 2002, with prices go­ing down as much as 70 per­cent.

Steven El­lis, the vice pres­id­ent for Tax­pay­ers for Com­mon Sense, said that even in 2002 there was “evid­ence at that time the mar­ket was start­ing to re­spond.” He didn’t back the pro­gram when it was ori­gin­ally in­tro­duced, but he said if the le­gis­la­tion is reau­thor­ized, “we should be in­creas­ing the private sec­tor’s skin in the game.”

Pro­fess­or Robert Rhee ad­ded that in­surers could mod­el for a ter­ror­ist event be­cause we “know where the as­sets are. We know where the risks are.” Though he said that the United States has a “heavy con­cen­tra­tion of losses,” re­fer­ring to ma­jor cit­ies, he noted that they make it dif­fi­cult, but not im­possible, to in­sure.

Mean­while, Neuge­bauer, R-Texas, said he would like to cut the fed­er­al gov­ern­ment’s in­volve­ment, ar­guing that it could be dis­tort­ing prices. “I think it is mar­ket-dis­tort­ing when the fed­er­al gov­ern­ment be­comes the back­stop “¦ most of the pri­cing is polit­ic­al.” 

But Leigh Ann Pu­sey, the pres­id­ent of the Amer­ic­an In­sur­ance As­so­ci­ation, said the pro­gram is less about private in­surers and more about the eco­nomy. “I think the eco­nomy still needs it,” she said, adding that she didn’t be­lieve the pro­gram was crowding out oth­er in­surers.

Both Neuge­bauer and Grimm want le­gis­la­tion out of the com­mit­tee in the first quarter of next year. Grimm, R-N.Y., said he was try­ing to get le­gis­la­tion passed by the end of 2013, but the House faces a lim­ited sched­ule. Neuge­bauer said le­gis­la­tion could be in­tro­duced in Feb­ru­ary and passed out of the com­mit­tee with­in a month or so. He is aim­ing to have le­gis­la­tion passed well in ad­vance of the Dec. 31 dead­line; the act has been reau­thor­ized twice be­fore, in 2005 and 2007.

But Grimm, un­like Neuge­bauer, wants to work at the start of the 114th Con­gress to make the pro­gram per­man­ent, with some slight changes. “TRIA has be­come like a baby to me, that needs to be nour­ished and taken care of,” he said. “It’s good policy. It works. It’s prudent fisc­al policy.”

He poin­ted to the rise of lone-wolf ter­ror­ists with­in the coun­try as a key reas­on. His com­ments echo those of FBI Dir­ect­or James Comey, who told the Sen­ate Home­land Se­cur­ity and Gov­ern­ment­al Af­fairs Com­mit­tee last week that while the risk of a 9/11-level of at­tack has de­creased, the coun­try faces a great­er risk from homegrown, lone-wolf at­tack­ers.

Grimm said he ex­pects the le­gis­la­tion to pass out of the com­mit­tee with a five-year re­new­al, and “changes the in­dustry can live with,” which may in­clude ad­just­ing premi­ums and in­creas­ing the trig­ger level, which is cur­rently set at $100 mil­lion.

Neuge­bauer also said a dis­tinc­tion could be made between con­ven­tion­al ter­ror­ist at­tacks and those that in­clude nuc­le­ar, bio­lo­gic­al, chem­ic­al, or ra­di­olo­gic­al weapons. He poin­ted to the “un­cer­tainty” over the po­ten­tial losses in such an event. “What are the long-term con­sequences of that?” he said.

Though Neuge­bauer said law­makers have been work­ing on the le­gis­la­tion for more than a year, he has yet to meet with the Sen­ate Bank­ing Com­mit­tee. He also ad­ded that he doesn’t know where Treas­ury Sec­ret­ary Jac­ob Lew stands, but would wel­come com­ments from the ad­min­is­tra­tion.

What We're Following See More »
CYBER THREATS INCREASING
Clapper: ISIS Will Try to Attack U.S. This Year
1 days ago
THE DETAILS

“Leaders of the Islamic State are determined to strike targets in the United States this year,” Director of National Intelligence James Clapper told a congressional panel today. Clapper added that “al-Qaida, from which the Islamic State spun off, remains an enemy and the U.S. will continue to see cyber threats from China, Russia and North Korea, which also is ramping up its nuclear program.”

Source:
CLYBURN WEIGHING HIS OWN NOD
CBC PAC to Endorse Clinton This Morning
5 hours ago
WHY WE CARE

The Congressional Black Caucus PAC will formally endorse Hillary Clinton this morning, and “nearly a dozen CBC colleagues will descend on” South Carolina next week in advance of that state’s important primary. Rep. Jim Clyburn (D-SC), the highest ranking black member of Congress, reversed his earlier position of neutrality, saying he’ll make a decision “later in the week.” Rep. Keith Ellison (D-MN) has pointed out that the CBC PAC is not the same things as the CBC itself, while the Intercept notes that 11 of the 20 board members of the PAC are lobbyists.

Source:
MORE TENSIONS ON KOREAN PENINSULA
Senate Votes 96-0 to Sanction North Korea
4 hours ago
THE LATEST

In a unanimous vote Wednesday night, the Senate echoed the House’s move last month to stiffen sanctions against North Korea. The bill “would sanction anyone who engages in, facilitates or contributes to North Korea’s proliferation of weapons of mass destruction, arms-related materials, luxury goods, human rights abuses, activities undermining cyber security and the provision of materials for such activities.” Senate Democrats said they expect the president to sign the bill. In related news, after South Korea suspended operations at a jointly run power station in the North, Pyongyang declared the area a military zone and cut off a hotline between the two countries.

Source:
THE QUESTION
How Large Is Hillary Clinton’s Delegate Lead?
4 hours ago
THE ANSWER

Three hundred fifty-two, thanks to superdelegates pledged to Clinton, and the vagaries of the delegate allocation process in early states. Not bad, considering her results have been a virtual tie and a blowout loss.

Source:
HE’D SIPHON OFF DEM VOTES
RNC Chief Would Welcome Bloomberg
3 hours ago
THE DETAILS

“The lead­ers of the Re­pub­lic­an and Demo­crat­ic na­tion­al com­mit­tees on Wed­nes­day weighed in on the pro­spect of an in­de­pend­ent pres­id­en­tial run by” former New York City May­or Mi­chael Bloomberg (I). “DNC Chair­wo­man Debbie Wasser­man Schultz sug­ges­ted that the former New York City may­or’s pri­or­it­ies are already ‘well cared-for’ in the Demo­crat­ic plat­form, while RNC lead­er Re­ince Priebus wel­comed the idea, say­ing Bloomberg would si­phon off votes from the Demo­crat­ic can­did­ate.”

Source:
×