Congress Passes TRIA Extension

WASHINGTON, DC-The US Congress has passed legislation calling for the renewal of the Terrorism Risk Insurance Act of 2002. After having passed their own respective bills–HR 4314 and S 467–the US House of Representatives and the US Senate came to a compromise on Friday and Saturday passed a bill that extends TRIA’s expiration date to December 31, 2007 and incorporates changes to the original legislation. For previous coverage, click here .

The legislation on which the House and Senate settled more closely resembles the Senate’s version of the bill, which the White House strongly supports, but encompasses significant aspects of both bills. As per the agreement, the level at which TRIA becomes activated will go up from $5 million to $50 million in 2006 and up to $100 million in 2007. Deductibles and co-payments will increase and there will be an increase in the responsibilities of the insurance industry.

One major aspect, however, in which the House and the Senate bills differ, is the issue of repayment of federal aid. The compromise bill calls for 25% repayment in 2006 and 27.5% in 2006, which is a far cry from the House’s call for 100% repayment.