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Senate committee expected to take up TRIA backstop soon, insider says

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Senate committee expected to take up TRIA backstop soon, insider says

LONDON — The U.S. Senate Banking, Housing and Urban Affairs Committee is likely to consider a bill on the reauthorization of the federal government's terrorism insurance backstop within the next two to three weeks, according to a source close to the negotiations.

And that bill — which has not yet been introduced — could reach the Senate floor before the summer recess, according to Robert Freeman, Washington D.C.-based government relations principal in law firm Cozen O'Connor's public strategies group. Mr. Freeman worked on the drafting of the Terrorism Risk Insurance Act of 2002, which created the program.

Speaking at an Insurance Institute of London lecture at Lloyd's of London Tuesday, Mr. Freeman said that he believed there was no doubt that the program would be reauthorized, likely for a period of five to seven years, before it expires, which will happen on Dec. 31 if it is not reauthorized.

Furthermore, Mr. Freeman said that both cyber terrorism and nuclear, biological, chemical and radiation risks may be included under a renewed terrorism insurance program.

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Other potential alterations to the backstop include a streamlining of the process under which a terrorism event would be certified as falling under the program's scope, Mr. Freeman noted. Currently a covered event has to be certified by the secretary of state, the treasury secretary and the attorney general, he pointed out.

Many members of Congress, however, have expressed concern that in practice that process could prove too lengthy in the event of a terrorist attack, he explained.

A potential streamlining of the process, whereby the secretary of the treasury would take a decision whether to certify an event in consultation with the secretary of state and the attorney general, is one possible change that could be seen in a reauthorized act, he said.

Negotiations on the reauthorization likely will continue to be thorny, Mr. Freeman noted. Objections to certain areas of the program are coming from both sides of the political aisle.

He noted that the lawmakers in both houses currently appear to be giving more weight to the concerns of small to medium-sized insurers than their larger counterparts.