WEDNESDAY, DECEMBER 31, 2014
The Terrorism Risk Insurance Act (TRIA) is set to expire after December 31, 2014. It is unclear how this will affect businesses at this point, but there is a potential for dire consequences.
The TRIA was passed in 2002, after the devastating events of September 11, 2001, as a means for the Federal government to back large losses by insurance companies in the event of a terrorism event that exceeds $100 million. Without the benefits of this law, it was becoming difficult for certain businesses were finding that insurance to cover the risk of terrorism was either not available or not affordable. The ripple effect caused lenders not to offer loans unless terrorism insurance was included in the businesses' insurance package.
Earlier this month, the U.S. House of Representatives passed a 6-year extension to the Act and increased the threshold from $100 million to $200 million. The bill was never allowed to come to the floor for a U.S. Senate vote on December 16, 2014. Consequently, the bill failed to pass and the Act dies at midnight on December 31, 2014. According to Senator Charles Schumer (D-NY) who pushed for Senate passage of the bill, "...billions of dollars of projects and hundreds of thousands of jobs are at stake."
At this point, the only hope for revival of the TRIA will be for both the House and the Senate to reintroduce the measure in January.
Robert Rusbult, president and CEO of the Independent Insurance Agents and Brokers Association, released the following statement on December 17, 2014: "With more than a week before Christmas, we are profoundly disappointed in the Senate's premature decision to leave town late last night without extending the Terrorism Risk Insurance Act which provides vital protection for the U.S. economy. The TRIA had overwhelming bipartisan support in both chambers of Congress along with strong support from the White House. This inaction is particularly galling in light of the 417-7 vote in the House last week on this same legislation. As if this weren't bad enough, thousands of small business owners and their customers are waking up this morning with coal in their stockings after somehow NARAB II, agent licensing reform that has already passed both chambers in different bills, was also left on the cutting room floor. We urge Congress to pass both common-sense, bipartisan pieces of legislation as soon as they convene for the 114th Congress early next year."
Source of IIABA excerpt: IndependentAgent.com;