The Senate last night adjourned for the year without voting to renew the Terrorism Risk Insurance Act, which will expire on Dec. 31. The bill had been blocked in a procedural move by outgoing Sen. Tom Coburn (R-Okla.), who objected to the provision in the TRIA bill establishing a national registry for insurance agents and brokers, NARAB.
With the House having already recessed, Senate Minority Whip John Cornyn (R-Texas) told news outlets that there will not likely be a stop-gap bill to extend TRIA. However, he did state that renewing TRIA is expected to be a priority in the 114th Congress, which will convene on Jan. 6.
What does Congress' failure to renew TRIA mean? Large commercial projects where the lender requires terrorism coverage could be in default on January 1, 2015, unless alternative coverage can be found. New projects where terrorism coverage is required will be postponed until the developer and the lender(s) decide how to proceed. In addition, as reported in the April 2014 Treasury Report on TRIA, rating agencies may write down commercial asset backed securities.
TRIA and NARAB continue to be top legislative priorities for the ABIA and we will renew efforts to ensure both are passed in the new Congress.