WASHINGTON – On September 19, two days after US President George Bush threatened to veto any extension to the Terrorism Risk Insurance Act (TRIA), the House of Representatives passed a new bill – the Terrorism Risk Insurance Revision and Extension Act – extending the government’s compensation scheme until 2022.
The TRIA was created after the September 11, 2001 attacks on the World Trade Center as a safety net for the insurance industry against terrorist-related risk and, after a 2005 renewal, was due to expire at the end of this year. The new bill expands the TRIA to also cover domestically generated terrorism. Cover includes nuclear, biological, chemical, and radiological threats and the minimum claim has been halved, from $100 million to $50 million.
A statement by the Office of Management and Budget on September 17 had vowed to veto any such development. Bush has not vetoed one bill in his six years in office, but has issued 39 veto threats since the Democrats achieved majorities in the House and Senate in January. The White House described the TRIA as a “temporary mechanism” introduced amid the post-9/11 market dislocation, designed to be phased out as the market matured, to develop private anti-terrorism insurance. The revised act is backed by the corporate and insurance sectors, who claim there is no adequate sustainable commercial basis for a transition of responsibility to the private insurance market.
The new bill has been sent to the floor of the Senate, which, if the bill is passed as expected, will await a response from the White House