Maloney hails passage of terrorism insurance bill

December 12, 2014 By Paula Katinas Brooklyn Daily Eagle
U.S. Rep. Carolyn Maloney says the insurance program is essential to New York’s economy. Photo courtesy Maloney’s office
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After months of debate and nail-biting negotiations, the House of Representatives passed a bill on Wednesday to extend the Terrorism Risk Insurance Act (TRIA) for an additional six years, according to U.S. Rep. Carolyn Maloney, who hailed the program as being essential to New York’s economy.

Maloney (D-North Brooklyn-Manhattan) was a key player in the final negotiations that helped secure passage of the bill. The legislation was overwhelmingly approved in the house by a vote of 417-7.

The TRIA was set to expire at the end of the year.

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Maloney said the TRIA program is important because it gives business owners in the construction industry the opportunity to purchase terrorism insurance. Under the TRIA, there is a federal backstop for insurance claims filed in relation to acts of terrorism.

“After Sept. 11, it was impossible for businesses to buy the terrorism insurance they needed to move forward with major construction projects. Development came to a halt, money for new projects dried up and our economy suffered a devastating blow. Nowhere was that more true than in New York. The Terrorism Risk Insurance Act was the solution, and it remains the solution. By providing a government backstop, it ensures that terrorism insurance is available and affordable, and the program works at no cost to taxpayers. After months of negotiations, I am so pleased we were able to pass this essential legislation,” Maloney said in a statement.

Maloney, a senior Democratic member of the House Financial Services Committee, was the lead Democratic co-sponsor of a TRIA Reauthorization Act last year, which would have extended the program without any changes. Similar legislation proposed by New York Sen. Chuck Schumer passed in the U.S. Senate in October by a vote of 93-4.

The Senate bill raises the share of losses that insurers have to pay in the event of a terrorist attack, increasing the industry’s “co-share” under TRIA from 15 percent to 20 percent.

But Republican leaders proposed several changes to the program, which would have made terrorism insurance unaffordable and less available, according to Maloney. The proposed changes included increasing the program’s trigger, or the point at which the government steps in to help cover losses in the event of an attack, by 500 percent. Republicans leaders also proposed changing the program by providing less insurance for conventional terrorist attacks than for nuclear, chemical, biological or radiological attacks.

The final deal, which was passed by the house on Dec. 10 after delicate negotiations, increased the program trigger from $100 million to $200 million and discarded the other provisions. Democrats, including Maloney, opposed the inclusion of a small tweak to the Dodd-Frank Wall Street reform law, which she had argued should be passed as a stand-alone measure.

The original TRIA program was created by Congress in 2002. It was set to expire in 2005, but was extended for two additional years. In 2007, Congress voted to extend the program for another seven years.

TRIA has operated at no cost to taxpayers, Maloney said. RAND Corporation found that eliminating the program could increase federal spending by as much as $7 billion in the event of a major attack.

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