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U.S.House to extend terrorism insurance backstop with reforms -lawmaker
September 18, 2014 / 4:11 PM / 3 years ago

U.S.House to extend terrorism insurance backstop with reforms -lawmaker

WASHINGTON, Sept 18 (Reuters) - A U.S. Republican lawmaker on Thursday told bankers that Congress would extend a federal terrorism risk insurance backstop created after the 2001 attacks, but conservatives would insist that the private sector shoulder more of the burden.

The U.S. Senate voted overwhelmingly in July to extend the program, which expires at the end of the year, by another seven years. The program is used by big businesses, owners of sports stadiums and other groups that insure against terrorist attacks.

The House of Representatives has struggled to agree on its own extension plan. Many conservatives want to scale back the federal government’s role in terrorism insurance.

Representative Paul Ryan, a leading voice in the Republican party, said conservatives want the insurance program to continue. But he said they could extend it only into 2015, when Republicans hope to control more seats in Congress, if they believed that was the best way to win changes.

“The way I see this coming down is, it’s going to get extended. The question is, Do you do reforms now and negotiate, or do you just do a short-term extension into next year and then negotiate reforms?” Ryan said before the Financial Services Roundtable, which is lobbying for the program’s extension.

“You will not see just a straight current law extension from what we understand in the House,” he said.

The Terrorism Risk Insurance Act, or TRIA, was first passed after the Sept. 11, 2001, attacks, when insurers suffered major losses and some stopped offering insurance against terrorist threats to commercial buildings.

TRIA, which has been reauthorized twice, requires insurers to offer certain types of coverage. If losses from an attack exceed a set amount, the federal backstop would kick in, though it has never been used.

The White House supports the Senate’s plan to give the program seven more years.

Conservatives led by House Financial Services Chairman Jeb Hensarling, a Republican of Texas, want to increase the private sector’s responsibility for terrorism insurance by raising the amount of losses an insurer must suffer before triggering federal support.

The Financial Services Roundtable’s members include big banks such as Bank of America, Citigroup and JPMorgan Chase, as well as other financial companies. Ryan told the group on Thursday to work with Hensarling to revamp the program rather than fighting him.

“We acknowledge and agree there has to be a backstop. There is a level of support that government does have to play here,” Ryan said. “But what we do not want to do is curtail or displace the ability of the private sector to come in and take as much of this space as possible.” (Reporting by Emily Stephenson; Editing by Leslie Adler)

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