WASHINGTON Rep. Randy Neugebauer, R-Texas, introduced a new plan Tuesday to modify and extend the Terrorism Risk Insurance Act.
The TRIA Reform Act of 2014 would reauthorize the terrorism risk insurance program, which provides a government backstop for insurers and reinsurers in the event of a catastrophic terrorist event, for five years, while increasing the role private companies would play in the market.
Most critically, the bill bifurcates attacks that are nuclear, chemical, biological or radiological from so-called "conventional" terrorism, raising industry costs for conventional attacks. The bill would phase in a higher trigger for the program in the case of a conventional attack from $100 million to $500 million. Insurers would be responsible for a 20% co-pay after a deductible following a conventional attack, compared with 15% for NCBR attacks.
"Over the past decade, the terrorism risk insurance marketplace has modernized and advanced. Now is the time for Congress to take off the training wheels and transition to a terrorism risk insurance market that is less dependent on a taxpayer-funded backstop," Neugebauer, a senior member of the Financial Services Committee, said in a press release. "The TRIA Reform Act of 2014 will lay the foundation for a more robust private market that protects American families from writing yet another blank check to yet another Washington program."
The House banking panel will vote on the legislation on Thursday.
The Senate Banking Committee, meanwhile, passed a bill earlier this month to extend TRIA for seven years. That legislation would increase insurers' co-pay for all attacks to 20% from 15% after a deductible and raise the mandatory recoupment threshold to $37.5 billion from $27.5 billion.
The terrorism risk insurance program is set to expire at the end of the year.