Washington – Connecticut’s property and casualty insurers and other businesses are urging Congress to beat a Dec. 31 deadline to renew a program designed to help pay for the costs of a terrorist attack.

The GOP-led House is balking at considering a bill approved by the Senate in April, 93-4, with strong bipartisan support. That bill would have extended the program for seven years.

House Finance Committee Chairman Jeb Henserling, R-Texas, said the bill the Senate approved should be amended to limit the cost to the government of a terrorist attack.

“If Senate Democrats continue to insist on their ‘my way or the highway’ approach, I fear a long-term reauthorization may have to wait until the next Congress,” Hensarling said.

Sen. Chris Murphy, D-Conn., who was a co-sponsor of the legislation when he was a member of the House of Representatives, said without the terrorism risk program, Connecticut’s property insurers, including The Hartford and Travelers “would be unable to offer significant terrorism coverage – exposing taxpayers to massive costs in the wake of an attack.”

“But this bill is about more than just insurance,” Murphy said. “Without TRIA coverage, vital construction projects and economic development will grind to a halt in every state.”

Before the 9/11 attacks, insurers did not charge for or exclude terrorism coverage in their business policies.

But after the estimated $40 billion in insurance payouts from the attacks in New York and Washington, and the downing of a plane in Pennsylvania, reinsurers withdrew from the markets. Without reinsurance, primary insurance companies were forced to exclude terrorism coverage from their policies.

Real estate, transportation, construction, energy, and utilities were considered the most vulnerable to losses from a new attack, placing the nation’s economy at risk.

So Congress stepped in by approving the Terrorism Risk Insurance Act in 2002, that in effect, made the federal government a backstop for terrorism coverage. Under the bill, if insurance losses incurred in a terrorist attack exceed $100 million, the federal government would pay the balance of the claims.

The terrorism risk bill was extended in 2005 and 2007. But it is set to expire at the end of the year.

To limit federal exposure in another terrorist attack, Republicans like Hensarling propose raising the cap to $500 million and adding other limits to the TRIA — changes insurers, the business community and congressional Democrats oppose.

“Simply put, TRIA protects taxpayers,” said Rep. Jim Himes, D-4th District, a member of the House Financial Services Committee. “Without the security that the TRIA program provides, the private insurance market would find the prospect of providing adequate terrorism risk insurance to be financially unviable. In this scenario, it would be safe to assume that many insurers will stop offering terrorism risk coverage altogether, leaving taxpayers on the hook.”

Congress may do what it often does when there’s an impasse – approve a short-term continuation for the program and leave a long-term solution to the next Congress, when Republicans will have control of both chambers.

But insurers like The Hartford, and Connecticut’s business community, favor a long-term reauthorization.

“The American business community needs certainty so that it can continue to focus on its primary mission of creating jobs,” said a letter to members of Congress that was signed by dozens of businesses and associations. They include the Hartford Ins. Co., GE Capital Real Estate, Starwood Hotels, the Connecticut Business & Industry Association, the Connecticut Insurance & Financial Services Cluster and the Connecticut Lodging Association.

The Hartford spokesman Thomas Hambrick said his company appreciates that key leaders in Congress have pledged to support reauthorizing TRIA and remains “cautiously optimistic” the act will be reauthorized this year.

“The withdrawal or delay in renewal of the government backstop for terrorism risk could create a large disruption across the entire economy,” Hambrick said. “Businesses, lenders, construction firms and, ultimately, their employees depend on TRIA to ensure access to terrorism risk coverage and ensure long-term market availability.”

Another group was formed to lobby Congress on terrorism risk insurance called the Coalition to Insure Against Terrorism, which is composed of dozens of businesses and trade associations, including the New England Business Council and the Helicopter Association International, which counts Sikorsky as a member.

“It is imperative that Congress reauthorize the Terrorism Risk Insurance Act (TRIA) now,” the council said in a statement. “With this critical program set to expire on December 31, members of Congress have just a few short weeks to ensure TRIA’s longevity for the long term.”

Major league sports associations, including Major League Baseball, the National Football League, the National Basketball Association and NASCAR are also part of the effort since stadiums and sports complexes are considered vulnerable to attacks.

Ana has written about politics and policy in Washington, D.C.. for Gannett, Thompson Reuters and UPI. She was a special correspondent for the Miami Herald, and a regular contributor to The New York TImes, Advertising Age and several other publications. She has also worked in broadcast journalism, for CNN and several local NPR stations. She is a graduate of the University of Maryland School of Journalism.

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