WASHINGTON – The Republican-controlled House is moving quickly to revive a lapsed government program that's credited with restoring the market for insurance against terrorism after the Sept. 11 attacks.
The terrorism risk insurance program was originally enacted in 2002 after the 9/11 attacks caused the private market for terrorism insurance to collapse. It provides a government backstop for private insurance companies in the event of catastrophic losses. The guarantee has made private companies more willing to underwrite policies against terrorist attacks.
The program expired at the end of last year. A compromise measure to extend it for another six years sailed through the House last month but got snagged in the Senate due to the objections of then-Sen. Tom Coburn, R-Okla.
House Majority Leader Kevin McCarthy, R-Calif., announced Monday that the House will again vote on the legislation later this week.
Under the expired program, the government covered 85 percent of losses after the first $100 million in damages from a terrorist attack. The government has never paid out under the law.
The legislation would reauthorize the program for six years and decrease the government's exposure by gradually increasing the "trigger" at which the program kicks in to $200 million. The government's share of catastrophic losses would be gradually lowered to 80 percent.
The legislation is important to economic sectors such as construction, real estate, hospitality and major sports leagues, which fear crippling insurance costs if the program expires and rates skyrocket — or the market for terrorism insurance collapses altogether.
The legislation represents a hard-won compromise between House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Sen. Charles Schumer, D-N.Y. Hensarling had been pushing far more dramatic changes to the program, but was unable to win enough support to advance them through the House.