Washington – The Senate on Thursday approved a bill that would help Connecticut’s property and casualty insurers by re-establishing a federal backstop in the event a terrorist attack results in massive claims.
The Terrorism Risk Insurance Act, or TRIA, was approved by the House on Wednesday, and the legislation now goes to President Obama, who is expected to sign it.
The program expired at the end of last year because the previous Congress failed to reauthorize it. That left insurers unsure if they could continue to offer protection against terrorist attacks without hiking premiums, perhaps to a point where the coverage was unaffordable for developers, retailers, owners of sports stadiums and other businesses that feel vulnerable to attacks.
“This reauthorization was essential and restores much-needed certainty to the insurance industry here in the Insurance Capital,” said Gov. Dannel Malloy. “We are grateful that the reauthorization had the strong support of Connecticut’s congressional delegation and that Congress moved swiftly and overwhelmingly to approve it.”
The vote to extend the terrorism risk program for another six years was overwhelming, 93 to 4. But it did not lack drama.
Sen. Elizabeth Warren, D-Mass., tried to strip a provision House Republicans attached to the bill that would change a part of the 2010 Dodd-Frank law concerning the impact of its derivatives rules on “end users,” which include non-financial companies like agriculture and energy firms that use these markets to hedge risk. Sens. Richard Blumenthal and Chris Murphy voted for the Warren amendment, but it failed on a 31-66 vote.
Increasingly, liberal Democrats in the House and Senate are following Warren’s lead in a campaign to protect Dodd-Frank from changes.
“TRIA is a must-pass bill of critical importance to Connecticut and our country,” Blumenthal said. “Including a measure unrelated to terrorism risk insurance sets a bad precedent in the first week of the Republican-led Senate. Our financial system would have been stronger had the extraneous provision been removed.”
The Terrorism Risk Insurance Act was established in 2002 after the 9-11 attacks. The new bill will help reimburse businesses for catastrophic losses above $200 million.
The program previously would kick in when losses exceeded $100 million, but lawmakers wanted to reduce the potential cost to taxpayers.