Although it is coming down to the wire, there seems to be little doubt that negotiators in the House and Senate will hammer out a compromise on the reauthorization bill for the Terrorism Risk Insurance Act (TRIA) in the next few days or weeks. Despite the fact that the House and Senate versions of the bill differ substantially and the White House has threatened to veto any bill that veers far from TRIA in its current form, industry and government insiders expect compromise legislation to emerge that extends TRIA for at least another seven years, similar to the Senate version, without some of the more expansive changes passed by the House in September–such as expanding TRIA coverage to nuclear, biological, chemical and radiological acts of terrorism–which currently are not part of the existing law.
“It’s absolutely critical that TRIA pass,” says Janice Ochenkowski, president of the Risk & Insurance Management Society (RIMS) and a managing director at Chicago real estate and financial services firm Jones Lang LaSalle. “We had a taste of what it was like not having a viable [terrorism] insurance market shortly after 9/11.” That was a time, she recalls, when construction projects had to be postponed because they could not buy either property or workers compensation coverage and companies struggled with sizable in hikes in almost every line of insurance–all factors that led to TRIA’s initial passage in 2002. “Given the state of the economy currently, we need this,” adds Ochenkowski.
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