Lawmakers are close to extending a federal program that covers a portion of corporations’ losses from acts of terrorism, according to three congressional aides.
House Financial Services Committee Chairman Jeb Hensarling and Senator Charles Schumer are nearing a deal on a six-year extension, according to the congressional staff members who asked not to be named because a deal hasn’t been announced. Insurers would be reimbursed by the government after their aggregate losses reach $200 million, the aides said.
House Speaker John Boehner told reporters today that he’s confident Congress will renew the program known as the Terrorism Risk Insurance Act. An agreement hasn’t been finalized and could still change, the aides said.
Agreement between Hensarling, a Texas Republican, and Schumer, a New York Democrat, would pave the way to another extension of the law, which is set to expire at the end of this month. It was initially authorized by Congress in 2002 because insurers began excluding terrorist acts from policies after the attacks of Sept. 11, 2001, and prices for terrorism-only insurance soared.
The contours of an agreement began to form late yesterday after meetings involving Hensarling, Schumer and House Majority Leader Kevin McCarthy. Previous talks had hit a standstill when Hensarling said Senate Democrats refused to negotiate and Schumer said Hensarling’s demands showed he wasn’t serious about coming up with a solution to extend the program.
Hensarling had been seeking to tie the reauthorization to a shift in funding for the Consumer Financial Protection Bureau and other changes to the 2010 Dodd-Frank Act, steps that Schumer resisted. The two sides haven’t worked out how to address the Dodd-Frank changes, the people said.
Insurers such as ACE Ltd. and the Hartford Financial Services Group Inc. have called on lawmakers to extend the program, as have universities, the National Football League and lobby groups such as the American Insurance Association.
Schumer’s bill is S.2244: Terrorism Risk Insurance Program Reauthorization Act of 2014.