U.S. Senate Passes TRIA Bill, Including NARAB II Language

Andrew Simpson of Insurance Journal reports that the U.S. Senate overwhelmingly passed a TRIA extension bill, the Terrorism Risk Insurance Program Reauthorization Act of 2014 (S. 2244), on July 17^th. The bill includes language creating NARAB II.

The Senate passed the legislation 93-4. The four no votes included: Marco Rubio (R-Fla.); Lamar Alexander (R-Tenn.); Tom Coburn (R-Okla.); and Pat Roberts (R-Kan.).

The Senate bill calls for a seven-year extension and increasing the insurer co-pay from 15 percent to 20 percent. Click here for the Insurance Journal article.

S. 2244 differs from a House bill currently under consideration—the TRIA Reform Act of 2014 (H.R. 4871)—which would extend the program for five years and phase out a federal backstop beyond nuclear, biological, chemical and radiological (NBCR) risks, as reported July 17^th by Arthur Postal of PropertyCasualty360.com; the House bill also includes NARAB II. However, Postal reports that the House bill, backed by leading conservatives on the Financial Services Committee, appears to be a non-starter with moderate Republicans from more urban districts, and that it may not have the votes to pass the House. Rep. Peter King (R-N.Y.), a moderate Republican from Queens, reportedly claims that as many as 30 House Republicans will oppose the conservative proposal backed by Reps. Jeb Hensarling (R-Texas) and Randy Neugebauer (R-Texas). If this is true, the legislation will fall well short of the 218 votes needed for passage. Click here for the PropertyCasualty360.com article.

If the Hensarling-Neugebauer proposal cannot overcome opposition by Democrats and moderate Republicans, it becomes likelier that the House will have to accept the Senate bill or draft something very close to it. The key for NARAB II backers will be to ensure that a new House proposal includes the NARAB II provisions. A similar House disconnect between conservatives and moderates on the flood bill earlier this year resulted in NARAB II being left out of the final legislation.

The internal politics of the Republican House caucus are also likely to come into play. Majority Leader Eric Cantor (R-Va.), who was instrumental in blocking the more conservative flood bill, suffered a shocking primary loss against a conservative challenger in June, resulting in California’s Kevin McCarthy (R-Bakersfield) becoming the new majority leader effective August 1^st. It may be very difficult for House Republican leadership to broker a TRIA bill that simultaneously keeps moderates from bolting and mollifies conservatives. An impasse in the House could seriously endanger the prospects of reauthorizing TRIA prior to the program’s expiration at year’s end.

The SLA will keep its members informed as new developments occur on this important issue.