House leaders released a proposed six-year extension of a federal program to insure property against the risk of terrorism, including a Republican proposal to revise a bank regulatory law.
The measure will be brought to the the House floor today, according to a House Republican leadership aide, who sought anonymity.
The Senate hasn’t accepted the House proposal. Majority Leader Harry Reid, a Nevada Democrat, told reporters today he didn’t expect the insurance plan extension to be part of a must- pass federal spending measure being negotiated this week.
House Financial Services Committee Chairman Jeb Hensarling and Democratic Senator Charles Schumer of New York agreed to increase a threshold so government reimbursement wouldn’t begin until a property owner’s losses reach $200 million, up from $100 million under the current program. The Terrorism Risk Insurance Act is set to expire Dec. 31.
Hensarling, a Texas Republican, added to the measure a provision to change the 2010 Dodd-Frank financial-services law. It would free agricultural and energy companies from having to post collateral for swaps that are traded directly with banks and not guaranteed at a third-party clearinghouse.
Banking regulators have moved this year to free so-called end-users from the requirement.
“By adding extraneous bills to TRIA that were never agreed on, this bill is putting the entire package in jeopardy,” Representative Carolyn Maloney, a New York Democrat, said in a statement.
She said that while she supports the TRIA reauthorization as well as the Dodd-Frank provision sought by Hensarling, inclusion of the banking language wasn’t part of the agreement between Schumer and Hensarling.
Treasury Secretary Jacob J. Lew sent a letter to Schumer on Dec. 7 saying that the TRIAreauthorization “should not be delayed due to disagreements over entirely unrelated financial regulatory issues.”
TRIA was created by Congress in 2002 because insurers began excluding terrorist acts from policies after the previous year’s Sept. 11 attacks, and prices for terrorism-only insurance soared.
Insurers including 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 lobbying groups such as the American Insurance Association.
Hensarling had previously said he wanted to abolish the terrorism insurance program and replace it with private coverage. Later he agreed it should be extended in some form.
He proposed limiting government reimbursement by raising the payout threshold to $500 million for attacks waged with conventional weapons.
–With assistance from James Rowley in Washington.