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Thursday, June 19, 2014

House Financial Service Committee Markup of TRIA - NARAB II Included

Today, the House Financial Service Committee marked-up its long awaited TRIA re-authorization bill (H.R. 4871). NARAB II was passed as an amendment to the TRIA bill, offered by Insurance Subcommittee Chairman Randy Neugebauer.

The TRIA Reform Act of 2014, with the associated NARAB II amendment, will be formerly voted on by the HFSC tomorrow morning and, if passed as expected, will then be placed on the House calendar for floor debate. The roll call vote on final passage of H.R.4871 and an amendment offered by Ranking member Waters have been held over until tomorrow morning when the HFSC will meet again to complete its work on the bill.

Based on the statements made during today’s Committee debate, we expect H.R.4871 to be approved tomorrow by a near party line vote.

Several of H.R. 4871's changes to the current TRIA program were strongly opposed by Democrats and Republicans. Democratic Committee members, along with New York Republican Rep. King, voiced opposition to provisions that:
  • Increase the program trigger. Damages must be at least as much as $500 million from a certified act of terrorism; once an individual insurer reaches their deductible, TRIA begins to compensate the insurer. S. 2244 set the program trigger at $100 million.
  • Allow small insurance companies to opt out of TRIA. 
  • Bifurcate between conventional and NCBR (Nuclear, chemical, biological, radioactive) terrorists attacks.
  • Set a timeline for certification of a terrorist act within 90 days, with an initial decision in 15 days.
  • Increases the recoupment amount to 150% of federal expenditures. The Senate and current law sets the recoupment amount to 133% of federal expenditures.
Besides the NARAB II amendment, only one other amendment was introduced and voted on. That amendment, offered by Ranking member Waters (D-CA), would have replaced the text of H.R. 4871 with a clean 10-year reauthorization of the current TRIA program. It was voted down along party lines in a voice vote and is expected to again be defeated along party lines during tomorrow's roll call vote. Several other amendments offered by both Democrats and Republicans were withdrawn either in the interest of time or because they were not germane.

Rep. Ed Royce (R-CA) withdrew an amendment to the NARAB amendment that addressed his concern that NARAB II gives NAIC too much authority. He withdrew this amendment in order to keep the House NARAB II language consistent with what the Senate passed in S. 1926 in January.

View the hearing.

If you have any questions, please contact Kevin McKechnie.
 
The ABIA has a Terrorism Insurance TRIA Task Force and a NARAB Task Force. If you would like to learn more about ABIA's support of TRIA and NARAB or join one or both of these Task Forces, please contact us and visit our website.