I want to pass on a report regarding TRIA reauthorization from Jim McIntyre, our intrepid representative down in Washington who has been monitoring captive related issues for VCIA.
The Senate has approved S.2244 to extend TRIA for seven years by a bipartisan vote of 93 to 4. The bill increases the insurers’ co-pay from 15 to 20 percent and raises the threshold of losses for mandatory federal recoupment of payments to $37.5 billion. Sen. Tester offered an amendment to S.2244 that establishes the National Association of Registered Agents and Brokers (NARAB), which simplifies the agent and broker licensing process to ensure they can serve clients no matter where they are domiciled. The Senate passed this amendment by a voice vote. The Senate-passed version of NARAB includes a two-year sunset provision which means Congress will have to reauthorize NARAB two years after the first license is issued, which could be about four years from enactment.
The House Financial Services Committee recently voted to report out a bill to extend the federal terrorism insurance program for another five years. HR. 4871 would extend TRIA for five years, increase the insurer co-pay to 20 percent, and create a new program bifurcation for nuclear, biological, chemical, or radiological (NBCR) type of attacks. The House legislation also increases the program’s trigger over a four year period from $100 million to $500 million for non-NBCR events. Clearly for the captive community the Senate version is preferable. Congressman Hensarling, who chairs the House Finance Committee, is no fan of TRIA and felt compelled to put something out there so as not to lose his voice in the debate. Although Jim and others close to the issue feel Congress will eventually pass some type of TRIA reauthorization before it expires on December 31, this sets up a potential end-of-the-year scenario where Congress will delay passage until the waning days of their term. Keep the Zantac close at hand…
Have a great weekend and, as always, please let me know of any issues or news affecting our great industry, or any ideas you might have to better serve you. Thank you all very much and I look forward to hearing from you!