The future of the Terrorism Risk Insurance Act, which provides a backstop for property insurers in case of a terrorist attack, is in jeopardy as Republicans and Democrats fight over additions to the bill.
Talks broke down as House Financial Services Chairman Jeb Hensarling, a Republican from Texas, pushed to include changes to Dodd-Frank in the bill, according to Politico. Dodd-Frank is the financial reform law passed in the wake of the Great Recession in 2010. Chuck Schumer, a Democrat from New York, is against revisions to that law.
The real estate industry backs the government insurance program. After the attacks of 9/11, insurers faced billions of dollars in claims from property owners. In turn, carriers raised premiums dramatically or dropped the coverage altogether, thus putting landlords at risk. But with the government backstop, insurance companies have been able to offer the coverage at a more reasonable price.
The Senate voted to renew the terrorism insurance program in July. But House Republicans are planning on sending the legislation — with the revisions to Dodd-Frank — as a standalone bill, according to Politico. If the House and Senate had reached an agreement on the measure, TRIA would have been folded into the $1.1 trillion federal funding bill that Congress passed late Tuesday.
If the insurance legislation includes revisions to Dodd-Frank, House Democrats are expected to vote against it, according to the website. If the measure doesn’t pass, the program will expire by the end of the year. [Politico] – Claire Moses