Revised TRIA renewal bill passes House close to deadline

Mortgage Banking, Jan, 2008

With little more than two weeks before it was set to expire, the House of Representatives passed a revised extension of the Terrorism Risk Insurance Act (TRIA) more in keeping with the Senate's version of terrorism-insurance renewal.

In a final vote of 303-116, the House passed H.R. 4299, the Terrorism Risk Insurance Program Reauthorization Act of 2007. H.R. 4299 overrules the House's original TRIA renewal bill, H.R. 2761, passed in October, by incorporating the entirety of the Senate's bill--including extending TRIA for only seven years instead of the 15 years the House originally sought.

The Senate's bill, S. 2285, the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA), was passed by unanimous vote in November. It would, among other things, extend the terrorism-insurance program for seven years, through Dec. 31, 2014.

In addition to the seven-year extension, H.R. 4299 accepts the Senate bill's provisions to clarify the $100 billion cap and accelerate the timing of the mandatory recoupment--recovering amounts paid to the Treasury Department up to $27.5 billion.

Both House and Senate bills also provide coverage for nuclear, biological, chemical or radiological (NBCR) attacks--a sticking point with the Bush administration; ensure coverage of domestic-source terrorism as well as foreign-based terrorist acts; and include, for the first time, a provision for group life insurance.

H.R. 4299 would also require Government Accountability Office (GAO) studies of NBCR events, as well as of availability and afford-ability of terrorism insurance in specific markets.

Mortgage Bankers Association (MBA) Chairman Kieran P. Quinn, CMB, applauded the House's passage of a revised bill, calling it critical to maintaining the smooth operation of the commercial real estate finance market.

"As real estate capital markets continue to weather industry turmoil, extending terrorism-risk insurance will resolve an important area of capital market uncertainly--the long-term availability of terrorism insurance," said Quinn.

Passage of the House bill on Dec. 12 put the ball back in the Senate's court with the deadline for the previous extension--the Terrorism Risk Insurance Extension Act of 2005 (TRIEA)--scheduled to expire Dec. 31.

As Mortgage Banking went to press in mid-December, a final terrorism-insurance renewal bill had yet to emerge from conference committee.