House Financial Services Committee Releases TRIA Extension Bill
June 12, 2014 — The House of Representatives Financial Services Committee yesterday released the TRIA Reform Act of 2014. The bill would extend the federal terrorism insurance backstop for five years, and explicitly includes nuclear, biological, chemical, and radiological (NBCR) acts of terrorism as covered perils eligible for federal reinsurance with no change to the triggering threshold.
However, significant changes to other portions of the bill will be phased in over time, such as the program trigger for non-NBCR events, federal co-share percentage, and mandatory recoupment provisions. At this time, the bill does not include substantial operational changes for 2015.
Other proposed changes include:
- The removal of the $5 million loss certification threshold.
- The phase-in of an increase to the federal reinsurance co-share percentage and triggering requirements to begin January 1, 2016.
- An increase in the Treasury Department's recoupment rate from 133% to 150%.
- New rules exempting those insurers facing financial hardship from the program's mandatory availability requirement.
- A fixed, 90-day timeline for certification of acts of terrorism, with a preliminary certification notice after 15 days.
The House Financial Services Committee will move to vote on the legislation in the coming weeks. It is important to remember that the introduced legislation could be changed with amendments during the committee's debate, after which it will then move to the House floor for a full vote.
Exact timing of further House action remains uncertain, but this is an encouraging development as there are now formal versions of a TRIA reauthorization bill in both the House and Senate.