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The House Financial Services Committee has approved legislation to bring much needed reforms to the Terrorism Risk Insurance Act (TRIA), extending the act beyond its end-of-year expiration date.
Texas Republican representative Randy Neugebauer introduced the bill which would extend the act through to 2019, while also streamlining the certification process and adding much needed transparency and accountability to the Financial Stability Oversight Council (FSOC).
There had been much anticipation with regards to the extension of the act, leaving insurers, including captive insurers, with uncertainty surrounding whether they can afford to continue providing terrorism cover.
The bill passed the House Committee, yet will still need to clear the full House for it to take effect from 1st January, 2015. The bill is expected to face opposition from the Democrats in its final stages.
“I applaud my colleagues on the Committee for passing the TRIA Reform Act to finally begin the transition to a terrorism risk insurance market that is more accountable to American families and hardworking taxpayers,” says Neugebauer (R-TX), chairman of the Financial Services Housing and Insurance Subcommittee and sponsor of the TRIA Reform Act of 2014.
Chairman Jeb Hensarling (R-TX) adds, “I do believe this bill is a reasonable set of changes to improve a needed-but-yet-still-temporary program and prepares stakeholders for the future by realistically assessing the true benefits and costs of TRIA’s current framework.”
The following is a summary of the bills the committee passed:
H.R. 4871, the TRIA Reform Act of 2014, reauthorizes the Terrorism Risk Insurance Act for five years while strengthening vital taxpayer protections and encouraging more robust private market participation without curtailing the program’s fundamental functions.
H.R. 4881, a bill to place a 1-year moratorium on the authority of FSOC to make financial stability determinations, would prevent the FSOC from designating any new insurance companies or asset managers as “systemically important” for one year as Congress continues to review the FSOC’s process for deeming bank and non-bank institutions as such.
H.R. 4387, the FSOC Transparency and Accountability Act, sponsored by Rep. Scott Garrett (R-NJ), improves the FSOC’s transparency and accountability by opening their meetings to non-FSOC members. It also increases the scrutiny of FSOC decisions including systemic designations.
TRIA, House Financial Services Committee, FSOC, Randy Neugebauer