23 June 2014 Insurance

House Committee approves TRIA extension

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 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 January 1, 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,” said 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) added: “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.”

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