Terrorism Risk Insurance Gets House Extension
The House gives the post-9/11 insurance backstop six more years.
House Republicans and Democrats found common ground on backing the terrorism insurance industry and voted to extend a federal backstop for the industry Wednesday, as time ticked down toward the program’s Dec. 31 expiration.
Although lawmakers were close to a compromise last summer, the bill to renew the program became mired this week in eleventh-hour negotiations over a separate spending bill to keep the government open, which lawmakers must pass before gaveling the 113th Congress closed, which they aim to do Thursday.
The terrorism risk insurance program was created in 2002 to pass along some of the risk of insuring football stadiums, ports, and office buildings to the federal government. After paying out a record $32 billion in claims for the Sept. 11, 2001 terrorist attacks, many private insurers decided that terrorist acts are too costly and unpredictable a risk to cover. Congress stepped in and passed the Terrorism Risk Insurance Act, requiring the government to compensate companies in the biggest attacks.
Although originally envisioned as a temporary program, industry groups from the National Football League to the American Hotel and Lodging Association successfully argued that the backstop is still necessary. Wednesday’s extension would incrementally shift some of the burden back to the private sector — losses would have to reach $200 million before the government steps in, rather than $100 million previously.
The Senate must still sign off on the proposal.
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