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Member, Beacon International Group, Ltd.
WASHINGTON--The House Financial Services Committee's Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises approved the Terrorism Risk Insurance Revision and Extension Act on Tuesday afternoon.
Among other things, the measure would extend the federal terrorism insurance backstop, which is slated to expire Dec. 31, for 10 years. It also would allow the backstop to respond to acts of domestic as well as foreign terrorism; require insurers to offer coverage for nuclear, chemical, biological and radiological attacks; and add group life insurance to the program's coverages.
Rep. Paul Kanjorski, D-Pa., the subcommittee's chairman, offered an amended version of the bill that modified insurers' NCBR exposure. Insurers would not be required to offer NCBR coverage until 2009. The deductibles charge under the program for NCBR coverage would drop to 3.5% and increase by 0.5% per year until reaching 7.5% in year 10 of the program.
The Kanjorski substitute bill also calls for adding a representative of the workers compensation insurance industry and a commercial real estate representative to a 21-member commission on terrorism risk insurance that would make recommendations concerning the marketplace within five years of TRIREA's enactment. The commission also would issue a report eight years after the bill became law.
The full committee plans to take up the measure next week.
The subcommittee also approved an amendment offered by Rep. Richard Baker, R-La., that would allow the backstop to respond to an event causing as little as $5 million in damage under some circumstances.