The House conceded the obvious today and passed the Senate version of legislation extending the federal backstop on terrorism reinsurance without any provision for group life insurance.
The vote was 360 in favor to 53, with 3 Democrats joining 50 Republicans in voting against the measure.
Also left out of the Terrorism Risk Insurance Act extension was a provision that would have limited insurers in using travel destination as a factor in underwriting life insurance policies.
But House Democrats did not accept the inevitable before taking some shots at the Senate, especially at Sen. Richard Shelby, R-Ala., ranking minority member of the Senate Banking Committee, who insisted that the Senate version would have to carry the day.
Both Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Rep. Gary Ackerman, D-N.Y., railed against the lack of communication the House had with the Senate.
Rep. Ackerman said during the debate he was introducing a bill today that would add a provision to the Senate bill that would increase terrorism risk insurance capacity for certain properties. Its provisions would apply to buildings in urban areas seen as prime terrorism targets where there is currently a shortage of such capacity available, even with the current TRIA program’s so-called reset provision.
But, he said, “Santa Claus is not going to give America terrorism risk insurance for Christmas, and we don’t live with the Easter bunny in the Senate’s Candy-Land, where catastrophic risk can be comfortably ignored.”
Rep. Ackerman added that, “Saying ‘the market will provide’ doesn’t make it true.”
“I do regret the breakdown in the U.S. Senate of the legislative process,” Rep. Frank commented. He explained that “We were told the senior Republican on the committee, the gentleman from Alabama [Sen. Shelby], simply refused to meet with us.”
He asked members of the Senate “not to put themselves in a position “where there is a one-person veto.”
Rising in support of the legislation, Rep. Spencer Bachus, R-Ala., ranking minority member of the House Financial Service Committee, called it a good compromise.
“While it is not a perfect bill, the Senate’s TRIA extension is a reasonable, bipartisan compromise that will ensure the continued vitality of our commercial insurance markets operating under the threat of global terrorism,” he said.
He called the 7-year extension “fiscally responsible” and said he supported it because it “otherwise limits and improves taxpayer protections and prevents further intrusion by the government into this market-based program.”
As passed by the House, H.R. 2761 – The Terrorism Risk Insurance Program Reauthorization Act of 2007–effectively extends the current program through 2014 and adds coverage of domestic terrorist events to the program.
It was passed under expedited rules requiring support by two-thirds of House members voting.
The next step is the likely signing of the bill by President Bush.
Bowing to the inevitable, a staff official of the American Council of Life Insurers, which had led the battle on behalf of life insurers to have group life included in the program, conceded defeat.
“Even though the public policy arguments for including group life in TRIA are compelling, we understood that this would be an uphill battle in the face of the veto threat from the administration,” said ACLI official Steve Brostoff.
The bill as passed by the House also leaves out two other provisions sought by the House. One would have cut the current trigger for federal involvement in paying claims from a terrorist attack from $100 million to $50 million.
Another House priority left out of the final bill would have increased terrorism risk insurance capacity for properties in urban areas seen as prime terrorism targets where there is currently a shortage of such capacity available, even with the current TRIA program in place.
The program is set to expire by Dec. 31, and Congress is working to finish action on must-do legislation and leave town as soon as possible this week.