[House Report 119-561]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 119-561
=======================================================================
TRIA PROGRAM REAUTHORIZATION ACT OF 2026
----------------
March 19, 2026.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
----------------
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 7128]
The Committee on Financial Services, to whom was referred
the bill (H.R. 7128) to extend the Terrorism Risk Insurance
Program, and for other purposes, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 3
Related Hearings................................................. 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 10
Performance Goals and Objectives................................. 10
Committee Cost Estimate.......................................... 10
New Budget Authority and CBO Cost Estimate....................... 10
Unfunded Mandates Statement...................................... 10
Earmark Statement................................................ 10
Federal Advisory Committee Act Statement......................... 11
Applicability to the Legislative Branch.......................... 11
Duplication of Federal Programs.................................. 11
Section-by-Section Analysis of the Legislation................... 11
Changes in Existing Law Made by the Bill, as Reported............ 11
Documents Included by Unanimous Consent.......................... 26
Dissenting Views................................................. 41
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``TRIA Program Reauthorization Act of
2026''.
SEC. 2. EXTENSION.
Section 108(a) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C.
6701 note) is amended by striking ``2027'' and inserting ``2034''.
SEC. 3. IMPROVEMENTS TO CERTIFICATION PROCESS.
Section 102(1) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C.
6701 note) is amended--
(1) in subparagraph (B)--
(A) in clause (i), by striking ``or'' at the end;
(B) in clause (ii), by striking ``exceed
$5,000,000.'' and inserting: ``exceed--
``(I) with respect to an act that
occurred in a year before 2029,
$5,000,000; and
``(II) with respect to an act that
occurred in 2029, or any year
thereafter, $10,000,000; or''; and
(C) by adding at the end the following:
``(iii) the Secretary did not certify such
act as an act of terrorism before the
expiration of the 90-day period following the
publication of a notice in the Federal Register
under subparagraph (D)(i).''; and
(2) by striking subparagraph (D) and inserting the following:
``(D) Notice requirements.--
``(i) In general.--The Secretary shall, not
later than 30 days after beginning the process
of determining whether to certify an act as an
act of terrorism, publish a notice in the
Federal Register that informs the public that
the Secretary is in the process of determining
whether to certify the act as an act of
terrorism.
``(ii) Additional notice permitted.--The
Secretary may, as the Secretary determines
appropriate, notify the public, through
publication in the Federal Register, or
otherwise, that an act is not being evaluated
by the Secretary to determine whether it should
be certified as an act of terrorism.''.
SEC. 4. TECHNICAL AMENDMENTS.
(a) In General.--Section 103(e)(7)(E)(i) of the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) in subclause (I)--
(A) by striking ``2022'' and inserting ``2029''; and
(B) by striking ``2024'' and inserting ``2031'';
(2) in subclause (II)--
(A) by striking ``2023'' and inserting ``2030'';
(B) by striking ``2029'' and inserting ``2036''; and
(C) by striking ``2024'' and inserting ``2031''; and
(3) in subclause (III)--
(A) by striking ``2029'' and inserting ``2036''; and
(B) by striking ``2024'' and inserting ``2031''.
(b) Technical Correction.--The Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) is amended by striking ``Terrorism Insurance
Program'' each place it appears in text and headings and inserting
``Terrorism Risk Insurance Program''.
Purpose and Summary
H.R. 7128, the TRIA Program Reauthorization Act of 2026,
was introduced on January 16, 2026, by Republican
Representative Mike Flood (NE-01). This bill amends the
Terrorism Risk Insurance Act of 2002 to extend Treasury's
Terrorism Insurance Program for an additional seven years
through the end of 2034. The bill also increases the minimum
threshold for certification of an act of terrorism to $10
million from $5 million beginning in 2029. Additionally, the
bill codifies an existing regulation for Treasury to provide a
public disclosure in the Federal Register within 30 days of
commencing the process to determine if an act can be certified
under the program, as well as requires Treasury to issue any
certification final determination within 90 days of that
notice.
Background and Need for Legislation
In the aftermath of the September 11 terrorist attacks,
which resulted in approximately $45 billion in insured losses,
insurers and reinsurers recognized that they lacked the data
necessary to reliably model or price terrorism risk. In
response, many substantially increased premiums for terrorism
coverage or excluded it altogether. The widespread use of
costly standalone terrorism policies disrupted insurance
markets, particularly for new construction projects and
employers with large, centralized workforces in higher-risk
locations such as New York City, Atlanta, and San Francisco.
To address the market demand, Congress enacted the
Terrorism Risk Insurance Act (TRIA) in 2002 as a temporary
federal backstop to stabilize pricing and restore market
capacity while the private sector rebuilt capital and improved
terrorism risk modeling. Since enactment, Congress has
periodically reauthorized the program (in 2005, 2007, 2015, and
2019) in recognition that terrorism risk remains difficult to
predict, highly correlated, and potentially catastrophic in
ways that challenge purely private insurance solutions. As a
result, TRIA has remained an important stabilizing mechanism
that supports the availability of terrorism risk insurance
across key sectors of the economy. It is important to note that
uncertainty surrounding the program's future can lead to higher
premiums, reduced coverage availability, or delayed investment
decisions long before an actual lapse occurs. This legislation
addresses that risk by extending TRIA for seven years providing
much needed certainty for insurers and policyholders alike.
The bill increases the program's qualifying loss threshold
from $5 million to $10 million beginning in 2029 providing
certainty to policyholders regarding the payment of future
claims and ensuring the federal backstop applies only to truly
noteworthy events. It also benefits policyholders through
codification of the regulatory requirement that Treasury
provide public notice whenever it begins considering whether to
certify an act under TRIA as well as establishing a 90-day
deadline from that notice for Treasury to issue any final
certification determination. Both changes would increase
program transparency and eliminate harmful delays that prevent
policyholders from having their insurance claims paid.
Committee Consideration
119TH CONGRESS
On January 16, 2026, Representative Flood introduced H.R.
7128, the TRIA Program Reauthorization Act of 2026, with
Representative Andrew Garbarino (R-NY) as original cosponsor.
Representatives Emanuel Cleaver (D-MO), Nydia Velazquez (D-NY),
and Ayanna Pressley (D-MA) were added subsequently as
cosponsors.
The bill was referred solely to the Committee on Financial
Services. A discussion draft version of the bill was attached
to the September 17, 2025, hearing titled ``The Reauthorization
of the Terrorism Risk Insurance Act of 2002.''
On January 22, 2026, the Committee on Financial Services
met in open session to consider, among others, H.R. 7128. The
Committee ordered H.R. 7128, as amended, to be reported with a
favorable recommendation to the House of Representatives.
Related Hearings
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 7128:
On September 17, 2025, the Subcommittee on Housing and
Insurance held a hearing titled, ``The Reauthorization of the
Terrorism Risk Insurance Act of 2002.'' The Subcommittee heard
testimony from: Mr. Baird Webel, Specialist in Financial
Economics, Congressional Research Service; Mrs. Elizabeth Heck,
Chairman, President, and CEO, Greater New York Insurance
Companies, on behalf of the National Association of Mutual
Insurance Companies; Ms. Michelle Sartain, President, Marsh
U.S. and Canada; Mr. Jason Schupp, Founder and Managing Member,
Centers of Better Insurance, LLC; and Commissioner Andrew N.
Mais, Connecticut Insurance Department, on behalf of the
National Association of Insurance Commissioners.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include record
votes on the motion to report legislation and amendments
thereto.
On January 22, 2026, the Committee ordered H.R. 7128, as
amended, to be reported with a favorable recommendation to the
House by a recorded vote of 51 yeas and 2 nays, a quorum being
present. (Record Vote No. FC-234).
The Committee considered the following amendments to H.R.
7128:
Representative Flood offered an amendment in
the nature of a substitute, which changes the proposed
minimum threshold for certification of an act of
terrorism from $25 million to $10 million, and made
minor edits and technical changes. This amendment was
adopted by a voice vote.
Representative John Rose (R-TN) offered an
amendment (No. 1), designated ROSETN_045. This
amendment shortens the reauthorization of the Terrorism
Risk Insurance Act from seven years to five years,
decreases the federal cost share to 70 percent,
increases the program trigger to $250 million, and
requires a study on charging insurers an annual
participation fee. This amendment failed by a recorded
vote of 2 yeas and 49 nays, a quorum being present.
(Record Vote No. FC-231).
Representative Sylvia Garcia (D-TX) offered
an amendment (No. 2), designated TRIA_AMEND_1. This
amendment requires the Treasury Secretary to cover
costs of damages incurred by a U.S. citizen as a result
of actions taken by U.S. Immigration and Customs
Enforcement, if a court determines such actions
violated the law. This amendment failed by a recorded
vote of 18 yeas and 34 nays, a quorum being present.
(Record Vote No. FC-232).
Ranking Member Waters offered an amendment
(No. 3), designated TRIA_AMEND_2. This amendment
requires the Treasury Secretary to cover the costs of
damages incurred by a U.S. citizen as a result of the
invocation of the Insurrection Act by the President.
This amendment failed by a recorded vote of 18 yeas and
34 nays, a quorum being present. (Record Vote No. FC-
233).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 7128 is to extend
and improve the government's private-sector insured terrorism
loss risk sharing plan created by the Terrorism Risk Insurance
Act of 2002.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 7128. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee will adopt as its own
the cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee will adopt as
its own the cost estimate for the bill prepared by the Director
of the Congressional Budget Office. However, a cost estimate
was not made available to the Committee in time for the filing
of this report. The Chairman of the Committee shall cause such
estimate to be printed in the Congressional Record upon its
receipt by the Committee.
Unfunded Mandates Statement
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Chairman of the Committee shall cause
such estimate to be printed in the Congressional Record upon
its receipt by the Committee.
Earmark Statement
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
Federal Advisory Committee Act Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides the short title is the ``TRIA Program
Reauthorization Act of 2026''.
Section 2. Extension
Section 2 extends the authorization period for the program
from 2027 through the end of 2034.
Section 3. Improvements to certification process
Section 3 increases the minimum threshold for certification
of an act of terrorism from $5 million to $10 million in 2029.
It also codifies the existing regulation that the Secretary
shall, not later than 30 days after beginning the process of
determining whether to certify an act as an act of terrorism,
publish a notice in the Federal Register that informs the
public such a process has begun. Additionally, it requires that
any final decision to certify an act must be made within 90
days of that public notice.
Section 4 Technical amendments
Section 4 updates the dates for the timing of mandatory
recoupment that, if the Secretary is required to collect
terrorism loss risk-spreading premiums under the Act, by which
such payments must be received. It also adjusts previous
references in statute to the ``Terrorism Insurance Program'' to
correctly read as the ``Terrorism Risk Insurance Program.''
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
TERRORISM RISK INSURANCE ACT OF 2002
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Terrorism
Risk Insurance Act of 2002''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title; table of contents.
TITLE I--[TERRORISM INSURANCE PROGRAM] TERRORISM RISK
INSURANCE PROGRAM
* * * * * * *
Sec. 103. [Terrorism Insurance Program] Terrorism Risk Insurance
Program.
* * * * * * *
TITLE I--[TERRORISM INSURANCE PROGRAM] TERRORISM RISK
INSURANCE PROGRAM
* * * * * * *
SEC. 102. DEFINITIONS.
In this title, the following definitions shall apply:
(1) Act of terrorism.--
(A) Certification.--The term ``act of
terrorism'' means any act that is certified by
the Secretary, in consultation with the
Secretary of Homeland Security, and the
Attorney General of the United States--
(i) to be an act of terrorism;
(ii) to be a violent act or an act
that is dangerous to--
(I) human life;
(II) property; or
(III) infrastructure;
(iii) to have resulted in damage
within the United States, or outside of
the United States in the case of--
(I) an air carrier or vessel
described in paragraph (5)(B);
or
(II) the premises of a United
States mission; and
(iv) to have been committed by an
individual or individuals, as part of
an effort to coerce the civilian
population of the United States or to
influence the policy or affect the
conduct of the United States Government
by coercion.
(B) Limitation.--No act shall be certified by
the Secretary as an act of terrorism if--
(i) the act is committed as part of
the course of a war declared by the
Congress, except that this clause shall
not apply with respect to any coverage
for workers' compensation; [or]
(ii) property and casualty insurance
losses resulting from the act, in the
aggregate, do not [exceed $5,000,000.]
exceed--
(I) with respect to an act
that occurred in a year before
2029, $5,000,000; and
(II) with respect to an act
that occurred in 2029, or any
year thereafter, $10,000,000;
or
(iii) the Secretary did not certify
such act as an act of terrorism before
the expiration of the 90-day period
following the publication of a notice
in the Federal Register under
subparagraph (D)(i).
(C) Determinations final.--Any certification
of, or determination not to certify, an act as
an act of terrorism under this paragraph shall
be final, and shall not be subject to judicial
review.
[(D) Timing of certification.--Not later than
9 months after the report required under
section 107 of the Terrorism Risk Insurance
Program Reauthorization Act of 2015 is
submitted to the appropriate committees of
Congress, the Secretary shall issue final rules
governing the certification process, including
establishing a timeline for which an act is
eligible for certification by the Secretary on
whether an act is an act of terrorism under
this paragraph.]
(D) Notice requirements.--
(i) In general.--The Secretary shall,
not later than 30 days after beginning
the process of determining whether to
certify an act as an act of terrorism,
publish a notice in the Federal
Register that informs the public that
the Secretary is in the process of
determining whether to certify the act
as an act of terrorism.
(ii) Additional notice permitted.--
The Secretary may, as the Secretary
determines appropriate, notify the
public, through publication in the
Federal Register, or otherwise, that an
act is not being evaluated by the
Secretary to determine whether it
should be certified as an act of
terrorism.
(E) Nondelegation.--The Secretary may not
delegate or designate to any other officer,
employee, or person, any determination under
this paragraph of whether, during the effective
period of the Program, an act of terrorism has
occurred.
(2) Affiliate.--The term ``affiliate'' means, with
respect to an insurer, any entity that controls, is
controlled by, or is under common control with the
insurer.
(3) Control.--
(A) In general.--An entity has ``control''
over another entity, if--
(i) the entity directly or indirectly
or acting through 1 or more other
persons owns, controls, or has power to
vote 25 percent or more of any class of
voting securities of the other entity;
(ii) the entity controls in any
manner the election of a majority of
the directors or trustees of the other
entity; or
(iii) the Secretary determines, after
notice and opportunity for hearing,
that the entity directly or indirectly
exercises a controlling influence over
the management or policies of the other
entity.
(B) Rule of construction.--An entity,
including any affiliate thereof, does not have
``control'' over another entity, if, as of the
date of enactment of the Terrorism Risk
Insurance Program Reauthorization Act of 2015,
the entity is acting as an attorney-in-fact, as
defined by the Secretary, for the other entity
and such other entity is a reciprocal insurer,
provided that the entity is not, for reasons
other than the attorney-in-fact relationship,
defined as having ``control'' under
subparagraph (A).
(4) Direct earned premium.--The term ``direct earned
premium'' means a direct earned premium for property
and casualty insurance issued by any insurer for
insurance against losses occurring at the locations
described in subparagraphs (A) and (B) of paragraph
(5).
(5) Insured loss.--The term ``insured loss'' means
any loss resulting from an act of terrorism (including
an act of war, in the case of workers' compensation)
that is covered by primary or excess property and
casualty insurance issued by an insurer if such loss--
(A) occurs within the United States; or
(B) occurs to an air carrier (as defined in
section 40102 of title 49, United States Code),
to a United States flag vessel (or a vessel
based principally in the United States, on
which United States income tax is paid and
whose insurance coverage is subject to
regulation in the United States), regardless of
where the loss occurs, or at the premises of
any United States mission.
(6) Insurer.--The term ``insurer'' means any entity,
including any affiliate thereof--
(A) that is--
(i) licensed or admitted to engage in
the business of providing primary or
excess insurance in any State;
(ii) not licensed or admitted as
described in clause (i), if it is an
eligible surplus line carrier listed on
the Quarterly Listing of Alien Insurers
of the NAIC, or any successor thereto;
(iii) approved for the purpose of
offering property and casualty
insurance by a Federal agency in
connection with maritime, energy, or
aviation activity;
(iv) a State residual market
insurance entity or State workers'
compensation fund; or
(v) any other entity described in
section 103(f), to the extent provided
in the rules of the Secretary issued
under section 103(f);
(B) that receives direct earned premiums for
any type of commercial property and casualty
insurance coverage, other than in the case of
entities described in sections 103(d) and
103(f); and
(C) that meets any other criteria that the
Secretary may reasonably prescribe.
(7) Insurer deductible.--The term ``insurer
deductible'' means--
(A) the value of an insurer's direct earned
premiums during the immediately preceding
calendar year, multiplied by 20 percent; and
(B) notwithstanding subparagraph (A), for any
calendar year, if an insurer has not had a full
year of operations during the calendar year
immediately preceding such calendar year, such
portion of the direct earned premiums of the
insurer as the Secretary determines
appropriate, subject to appropriate
methodologies established by the Secretary for
measuring such direct earned premiums.
(8) NAIC.--The term ``NAIC'' means the National
Association of Insurance Commissioners.
(9) Person.--The term ``person'' means any
individual, business or nonprofit entity (including
those organized in the form of a partnership, limited
liability company, corporation, or association), trust
or estate, or a State or political subdivision of a
State or other governmental unit.
(10) Program.--The term ``Program'' means the
[Terrorism Insurance Program] Terrorism Risk Insurance
Program established by this title.
(11) Property and casualty insurance.--The term
``property and casualty insurance''--
(A) means commercial lines of property and
casualty insurance, including excess insurance,
workers' compensation insurance, and directors
and officers liability insurance; and
(B) does not include--
(i) Federal crop insurance issued or
reinsured under the Federal Crop
Insurance Act (7 U.S.C. 1501 et seq.),
or any other type of crop or livestock
insurance that is privately issued or
reinsured;
(ii) private mortgage insurance (as
that term is defined in section 2 of
the Homeowners Protection Act of 1998
(12 U.S.C. 4901)) or title insurance;
(iii) financial guaranty insurance
issued by monoline financial guaranty
insurance corporations;
(iv) insurance for medical
malpractice;
(v) health or life insurance,
including group life insurance;
(vi) flood insurance provided under
the National Flood Insurance Act of
1968 (42 U.S.C. 4001 et seq.);
(vii) reinsurance or retrocessional
reinsurance;
(viii) commercial automobile
insurance;
(ix) burglary and theft insurance;
(x) surety insurance;
(xi) professional liability
insurance; or
(xii) farm owners multiple peril
insurance.
(12) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury.
(13) State.--The term ``State'' means any State of
the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, American Samoa, Guam, each of
the United States Virgin Islands, and any territory or
possession of the United States.
(14) United states.--The term ``United States'' means
the several States, and includes the territorial sea
and the continental shelf of the United States, as
those terms are defined in the Violent Crime Control
and Law Enforcement Act of 1994 (18 U.S.C. 2280, 2281).
(15) Rule of construction for dates.--With respect to
any reference to a date in this title, such day shall
be construed--
(A) to begin at 12:01 a.m. on that date; and
(B) to end at midnight on that date.
SEC. 103. [TERRORISM INSURANCE PROGRAM] TERRORISM RISK INSURANCE
PROGRAM.
(a) Establishment of Program.--
(1) In general.--There is established in the
Department of the Treasury the [Terrorism Insurance
Program] Terrorism Risk Insurance Program.
(2) Authority of the secretary.--Notwithstanding any
other provision of State or Federal law, the Secretary
shall administer the Program, and shall pay the Federal
share of compensation for insured losses in accordance
with subsection (e).
(3) Mandatory participation.--Each entity that meets
the definition of an insurer under this title shall
participate in the Program.
(b) Conditions for Federal Payments.--No payment may be made
by the Secretary under this section with respect to an insured
loss that is covered by an insurer, unless--
(1) the person that suffers the insured loss, or a
person acting on behalf of that person, files a claim
with the insurer;
(2) the insurer provides clear and conspicuous
disclosure to the policyholder of the premium charged
for insured losses covered by the Program and the
Federal share of compensation for insured losses under
the Program--
(A) in the case of any policy that is issued
before the date of enactment of this Act, not
later than 90 days after that date of
enactment;
(B) in the case of any policy that is issued
within 90 days of the date of enactment of this
Act, at the time of offer and renewal of the
policy; and
(C) in the case of any policy that is issued
more than 90 days after the date of enactment
of this Act, on a separate line item in the
policy, at the time of offer and renewal of the
policy;
(3) in the case of any policy that is issued after
the date of enactment of the Terrorism Risk Insurance
Program Reauthorization Act of 2007, the insurer
provides clear and conspicuous disclosure to the
policyholder of the existence of the $100,000,000,000
cap under subsection (e)(2), at the time of offer,
purchase, and renewal of the policy;
(4) the insurer processes the claim for the insured
loss in accordance with appropriate business practices,
and any reasonable procedures that the Secretary may
prescribe; and
(5) the insurer submits to the Secretary, in
accordance with such reasonable procedures as the
Secretary may establish--
(A) a claim for payment of the Federal share
of compensation for insured losses under the
Program;
(B) written certification--
(i) of the underlying claim; and
(ii) of all payments made for insured
losses; and
(C) certification of its compliance with the
provisions of this subsection.
(c) Mandatory Availability.--During each calendar year, each
entity that meets the definition of an insurer under section
102--
(1) shall make available, in all of its property and
casualty insurance policies, coverage for insured
losses; and
(2) shall make available property and casualty
insurance coverage for insured losses that does not
differ materially from the terms, amounts, and other
coverage limitations applicable to losses arising from
events other than acts of terrorism.
(d) State Residual Market Insurance Entities.--
(1) In general.--The Secretary shall issue
regulations, as soon as practicable after the date of
enactment of this Act, that apply the provisions of
this title to State residual market insurance entities
and State workers' compensation funds.
(2) Treatment of certain entities.--For purposes of
the regulations issued pursuant to paragraph (1)--
(A) a State residual market insurance entity
that does not share its profits and losses with
private sector insurers shall be treated as a
separate insurer; and
(B) a State residual market insurance entity
that shares its profits and losses with private
sector insurers shall not be treated as a
separate insurer, and shall report to each
private sector insurance participant its share
of the insured losses of the entity, which
shall be included in each private sector
insurer's insured losses.
(3) Treatment of participation in certain entities.--
Any insurer that participates in sharing profits and
losses of a State residual market insurance entity
shall include in its calculations of premiums any
premiums distributed to the insurer by the State
residual market insurance entity.
(e) Insured Loss Shared Compensation.--
(1) Federal share.--
(A) In general.--The Federal share of
compensation under the Program to be paid by
the Secretary for insured losses of an insurer
during each calendar year shall be equal to 85
percent and beginning on January 1, 2016, shall
decrease by 1 percentage point per calendar
year until equal to 80 percent of that portion
of the amount of such insured losses that
exceeds the applicable insurer deductible
required to be paid during such calendar year.
(B) Program trigger.--In the case of
certified acts of terrorism occurring after
March 31, 2006, no compensation shall be paid
by the Secretary under subsection (a), unless
the aggregate industry insured losses resulting
from such certified acts of terrorism exceed--
(i) $100,000,000, with respect to
such insured losses occurring in
calendar year 2015;
(ii) $120,000,000, with respect to
such insured losses occurring in
calendar year 2016;
(iii) $140,000,000, with respect to
such insured losses occurring in
calendar year 2017;
(iv) $160,000,000, with respect to
such insured losses occurring in
calendar year 2018;
(v) $180,000,000, with respect to
such insured losses occurring in
calendar year 2019; and
(vi) $200,000,000, with respect to
such insured losses occurring in
calendar year 2020 and any calendar
year thereafter.
(C) Prohibition on duplicative
compensation.--The Federal share of
compensation for insured losses under the
Program shall be reduced by the amount of
compensation provided by the Federal Government
to any person under any other Federal program
for those insured losses.
(2) Cap on annual liability.--
(A) In general.--Notwithstanding paragraph
(1) or any other provision of Federal or State
law, if the aggregate insured losses exceed
$100,000,000,000, during a calendar year--
(i) the Secretary shall not make any
payment under this title for any
portion of the amount of such losses
that exceeds $100,000,000,000; and
(ii) no insurer that has met its
insurer deductible shall be liable for
the payment of any portion of the
amount of such losses that exceeds
$100,000,000,000.
(B) Insurer share.--
(i) In general.--For purposes of
subparagraph (A), the Secretary shall
determine the pro rata share of insured
losses to be paid by each insurer that
incurs insured losses under the
Program, except that, notwithstanding
paragraph (1) or any other provision of
Federal or State law, no insurer may be
required to make any payment for
insured losses in excess of its
deductible under section 102(7)
combined with its share of insured
losses under paragraph (1)(A) of this
subsection.
(ii) Regulations.--Not later than 240
days after the date of enactment of the
Terrorism Risk Insurance Program
Reauthorization Act of 2007, the
Secretary shall issue final regulations
for determining the pro rata share of
insured losses under the Program when
insured losses exceed $100,000,000,000,
in accordance with clause (i).
(iii) Report to congress.--Not later
than 120 days after the date of
enactment of the Terrorism Risk
Insurance Program Reauthorization Act
of 2007, the Secretary shall provide a
report to the Committee on Banking,
Housing, and Urban Affairs of the
Senate and the Committee on Financial
Services of the House of
Representatives describing the process
to be used by the Secretary for
determining the allocation of pro rata
payments for insured losses under the
Program when such losses exceed
$100,000,000,000.
(3) Notice to congress.--The Secretary shall notify
the Congress if estimated or actual aggregate insured
losses exceed $100,000,000,000 during any calendar
year. The Secretary shall provide an initial notice to
Congress not later than 15 days after the date of an
act of terrorism, stating whether the Secretary
estimates that aggregate insured losses will exceed
$100,000,000,000.
(4) Final netting.--The Secretary shall have sole
discretion to determine the time at which claims
relating to any insured loss or act of terrorism shall
become final.
(5) Determinations final.--Any determination of the
Secretary under this subsection shall be final, unless
expressly provided, and shall not be subject to
judicial review.
(6) Insurance marketplace aggregate retention
amount.--
(A) In general.--For purposes of paragraph
(7), the insurance marketplace aggregate
retention amount shall be the lesser of--
(i) $27,500,000,000, as such amount
is revised pursuant to this paragraph;
and
(ii) the aggregate amount, for all
insurers, of insured losses during such
calendar year.
(B) Revision of insurance marketplace
aggregate retention amount.--
(i) Phase-in.--Beginning in the
calendar year of enactment of the
Terrorism Risk Insurance Program
Reauthorization Act of 2015, the amount
set forth under subparagraph (A)(i)
shall increase by $2,000,000,000 per
calendar year until equal to
$37,500,000,000.
(ii) Further revision.--Beginning in
the calendar year that follows the
calendar year in which the amount set
forth under subparagraph (A)(i) is
equal to $37,500,000,000, the amount
under subparagraph (A)(i) shall be
revised to be the amount equal to the
annual average of the sum of insurer
deductibles for all insurers
participating in the Program for the
prior 3 calendar years, as such sum is
determined by the Secretary under
subparagraph (C).
(C) Rulemaking.--Not later than 3 years after
the date of enactment of the Terrorism Risk
Insurance Program Reauthorization Act of 2015,
the Secretary shall--
(i) issue final rules for determining
the amount of the sum described under
subparagraph (B)(ii); and
(ii) provide a timeline for public
notification of such determination.
(7) Recoupment of federal share.--
(A) Mandatory recoupment amount.--For
purposes of this paragraph, the mandatory
recoupment amount shall be the difference
between--
(i) the insurance marketplace
aggregate retention amount under
paragraph (6); and
(ii) the aggregate amount, for all
insurers, of insured losses during such
period that are not compensated by the
Federal Government because such
losses--
(I) are within the insurer
deductible for the insurer
subject to the losses; or
(II) are within the portion
of losses of the insurer that
exceed the insurer deductible,
but are not compensated
pursuant to paragraph (1).
(B) [Reserved.]
(C) Mandatory establishment of surcharges to
recoup mandatory recoupment amount.--The
Secretary shall collect, for repayment of the
Federal financial assistance provided in
connection with all acts of terrorism (or acts
of war, in the case of workers compensation),
terrorism loss risk-spreading premiums in an
amount equal to 140 percent of any mandatory
recoupment amount as calculated under
subparagraph (A) for such period.
(D) Discretionary recoupment of remainder of
financial assistance.--To the extent that the
amount of Federal financial assistance provided
exceeds any mandatory recoupment amount, the
Secretary may recoup, through terrorism loss
risk-spreading premiums, such additional
amounts that the Secretary believes can be
recouped, based on--
(i) the ultimate costs to taxpayers
of no additional recoupment;
(ii) the economic conditions in the
commercial marketplace, including the
capitalization, profitability, and
investment returns of the insurance
industry and the current cycle of the
insurance markets;
(iii) the affordability of commercial
insurance for small- and medium-sized
businesses; and
(iv) such other factors as the
Secretary considers appropriate.
(E) Timing of mandatory recoupment.--
(i) In general.--If the Secretary is
required to collect terrorism loss
risk-spreading premiums under
subparagraph (C)--
(I) for any act of terrorism
that occurs on or before
December 31, [2022] 2029, the
Secretary shall collect all
required premiums by September
30, [2024] 2031;
(II) for any act of terrorism
that occurs between January 1
and December 31, [2023] 2030,
the Secretary shall collect 35
percent of any required
premiums by September 30,
[2024] 2031, and the remainder
by September 30, [2029] 2036;
and
(III) for any act of
terrorism that occurs on or
after January 1, [2024] 2031,
the Secretary shall collect all
required premiums by September
30, [2029] 2036.
(ii) Regulations required.--Not later
than 180 days after the date of
enactment of this subparagraph, the
Secretary shall issue regulations
describing the procedures to be used
for collecting the required premiums in
the time periods referred to in clause
(i).
(F) Notice of estimated losses.--Not later
than 90 days after the date of an act of
terrorism, the Secretary shall publish an
estimate of aggregate insured losses, which
shall be used as the basis for determining
whether mandatory recoupment will be required
under this paragraph. Such estimate shall be
updated as appropriate, and at least annually.
(8) Policy surcharge for terrorism loss risk-
spreading premiums.--
(A) Policyholder premium.--Any amount
established by the Secretary as a terrorism
loss risk-spreading premium shall--
(i) be imposed as a policyholder
premium surcharge on property and
casualty insurance policies in force
after the date of such establishment;
(ii) begin with such period of
coverage during the year as the
Secretary determines appropriate; and
(iii) be based on a percentage of the
premium amount charged for property and
casualty insurance coverage under the
policy.
(B) Collection.--The Secretary shall provide
for insurers to collect terrorism loss risk-
spreading premiums and remit such amounts
collected to the Secretary.
(C) Percentage limitation.--A terrorism loss
risk-spreading premium collected on a
discretionary basis pursuant to paragraph
(7)(D) may not exceed, on an annual basis, the
amount equal to 3 percent of the premium
charged for property and casualty insurance
coverage under the policy.
(D) Adjustment for urban and smaller
commercial and rural areas and different lines
of insurance.--
(i) Adjustments.--In determining the
method and manner of imposing terrorism
loss risk-spreading premiums, including
the amount of such premiums, the
Secretary shall take into
consideration--
(I) the economic impact on
commercial centers of urban
areas, including the effect on
commercial rents and commercial
insurance premiums,
particularly rents and premiums
charged to small businesses,
and the availability of lease
space and commercial insurance
within urban areas;
(II) the risk factors related
to rural areas and smaller
commercial centers, including
the potential exposure to loss
and the likely magnitude of
such loss, as well as any
resulting cross-subsidization
that might result; and
(III) the various exposures
to terrorism risk for different
lines of insurance.
(ii) Recoupment of adjustments.--Any
mandatory recoupment amounts not
collected by the Secretary because of
adjustments under this subparagraph
shall be recouped through additional
terrorism loss risk-spreading premiums,
in accordance with the timing
requirements of paragraph (7)(E).
(E) Timing of premiums.--The Secretary may
adjust the timing of terrorism loss risk-
spreading premiums to provide for equivalent
application of the provisions of this title to
policies that are not based on a calendar year,
or to apply such provisions on a daily,
monthly, or quarterly basis, as appropriate.
(f) Captive Insurers and Other Self-Insurance Arrangements.--
The Secretary may, in consultation with the NAIC or the
appropriate State regulatory authority, apply the provisions of
this title, as appropriate, to other classes or types of
captive insurers and other self-insurance arrangements by
municipalities and other entities (such as workers'
compensation self-insurance programs and State workers'
compensation reinsurance pools), but only if such application
is determined before the occurrence of an act of terrorism in
which such an entity incurs an insured loss and all of the
provisions of this title are applied comparably to such
entities.
(g) Reinsurance to Cover Exposure.--
(1) Obtaining coverage.--This title may not be
construed to limit or prevent insurers from obtaining
reinsurance coverage for insurer deductibles or insured
losses retained by insurers pursuant to this section,
nor shall the obtaining of such coverage affect the
calculation of such deductibles or retentions.
(2) Limitation on financial assistance.--The amount
of financial assistance provided pursuant to this
section shall not be reduced by reinsurance paid or
payable to an insurer from other sources, except that
recoveries from such other sources, taken together with
financial assistance for the calendar year provided
pursuant to this section, may not exceed the aggregate
amount of the insurer's insured losses for the calendar
year. If such recoveries and financial assistance for
the calendar year exceed such aggregate amount of
insured losses for the calendar year and there is no
agreement between the insurer and any reinsurer to the
contrary, an amount in excess of such aggregate insured
losses shall be returned to the Secretary.
(h) Group Life Insurance Study.--
(1) Study.--The Secretary shall study, on an
expedited basis, whether adequate and affordable
catastrophe reinsurance for acts of terrorism is
available to life insurers in the United States that
issue group life insurance, and the extent to which the
threat of terrorism is reducing the availability of
group life insurance coverage for consumers in the
United States.
(2) Conditional Coverage.--To the extent that the
Secretary determines that such coverage is not or will
not be reasonably available to both such insurers and
consumers, the Secretary shall, in consultation with
the NAIC--
(A) apply the provisions of this title, as
appropriate, to providers of group life
insurance; and
(B) provide such restrictions, limitations,
or conditions with respect to any financial
assistance provided that the Secretary deems
appropriate, based on the study under paragraph
(1).
(i) Study and Report.--
(1) Study.--The Secretary, after consultation with
the NAIC, representatives of the insurance industry,
and other experts in the insurance field, shall conduct
a study of the potential effects of acts of terrorism
on the availability of life insurance and other lines
of insurance coverage, including personal lines.
(2) Report.--Not later than 9 months after the date
of enactment of this Act, the Secretary shall submit a
report to the Congress on the results of the study
conducted under paragraph (1).
* * * * * * *
SEC. 108. TERMINATION OF PROGRAM.
(a) Termination of Program.--The Program shall terminate on
December 31, [2027] 2034.
(b) Continuing Authority to Pay or Adjust Compensation.--
Following the termination of the Program, the Secretary may
take such actions as may be necessary to ensure payment,
recoupment, reimbursement, or adjustment of compensation for
insured losses arising out of any act of terrorism occurring
during the period in which the Program was in effect under this
title, in accordance with the provisions of section 103 and
regulations promulgated thereunder.
(c) Repeal; Savings Clause.--This title is repealed on the
final termination date of the Program under subsection (a),
except that such repeal shall not be construed--
(1) to prevent the Secretary from taking, or causing
to be taken, such actions under subsection (b) of this
section, paragraph (4), (5), (6), (7), or (8) of
section 103(e), or subsection (a)(1), (c), (d), or (e)
of section 104, as in effect on the day before the date
of such repeal, or applicable regulations promulgated
thereunder, during any period in which the authority of
the Secretary under subsection (b) of this section is
in effect; or
(2) to prevent the availability of funding under
section 104(g) during any period in which the authority
of the Secretary under subsection (b) of this section
is in effect.
(d) Study and Report on the Program.--
(1) Study.--The Secretary, in consultation with the
NAIC, representatives of the insurance industry and of
policy holders, other experts in the insurance field,
and other experts as needed, shall assess the
effectiveness of the Program and the likely capacity of
the property and casualty insurance industry to offer
insurance for terrorism risk after termination of the
Program, and the availability and affordability of such
insurance for various policyholders, including
railroads, trucking, and public transit.
(2) Report.--The Secretary shall submit a report to
the Congress on the results of the study conducted
under paragraph (1) not later than June 30, 2005.
(e) Analysis of Market Conditions for Terrorism Risk
Insurance.--
(1) In general.--The President's Working Group on
Financial Markets, in consultation with the National
Association of Insurance Commissioners, representatives
of the insurance industry, representatives of the
securities industry, and representatives of policy
holders, shall perform an ongoing analysis regarding
the long-term availability and affordability of
insurance for terrorism risk.
(2) Report.--Not later than September 30, 2006, and
thereafter in 2010 and 2013, the President's Working
Group on Financial Markets shall submit a report to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives on its findings pursuant to
the analysis conducted under paragraph (1).
(f) Insurance for Nuclear, Biological, Chemical, and
Radiological Terrorist Events.--
(1) Study.--The Comptroller General of the United
States shall examine--
(A) the availability and affordability of
insurance coverage for losses caused by
terrorist attacks involving nuclear,
biological, chemical, or radiological
materials;
(B) the outlook for such coverage in the
future; and
(C) the capacity of private insurers and
State workers compensation funds to manage risk
associated with nuclear, biological, chemical,
and radiological terrorist events.
(2) Report.--Not later than 1 year after the date of
enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2007, the Comptroller General
shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives a
report containing a detailed statement of the findings
under paragraph (1), and recommendations for any
legislative, regulatory, administrative, or other
actions at the Federal, State, or local levels that the
Comptroller General considers appropriate to expand the
availability and affordability of insurance for
nuclear, biological, chemical, or radiological
terrorist events.
(g) Availability and Affordability of Terrorism Insurance in
Specific Markets.--
(1) Study.--The Comptroller General of the United
States shall conduct a study to determine whether there
are specific markets in the United States where there
are unique capacity constraints on the amount of
terrorism risk insurance available.
(2) Elements of study.--The study required by
paragraph (1) shall contain--
(A) an analysis of both insurance and
reinsurance capacity in specific markets,
including pricing and coverage limits in
existing policies;
(B) an assessment of the factors contributing
to any capacity constraints that are
identified; and
(C) recommendations for addressing those
capacity constraints.
(3) Report.--Not later than 180 days after the date
of enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2007, the Comptroller General
shall submit a report on the study required by
paragraph (1) to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(h) Study of Small Insurer Market Competitiveness.--
(1) In general.--Not later than June 30, 2017, and
every other June 30 thereafter, the Secretary shall
conduct a study of small insurers (as such term is
defined by regulation by the Secretary) participating
in the Program, and identify any competitive challenges
small insurers face in the terrorism risk insurance
marketplace, including--
(A) changes to the market share, premium
volume, and policyholder surplus of small
insurers relative to large insurers;
(B) how the property and casualty insurance
market for terrorism risk differs between small
and large insurers, and whether such a
difference exists within other perils;
(C) the impact of the Program's mandatory
availability requirement under section 103(c)
on small insurers;
(D) the effect of increasing the trigger
amount for the Program under section
103(e)(1)(B) on small insurers;
(E) the availability and cost of private
reinsurance for small insurers; and
(F) the impact that State workers
compensation laws have on small insurers and
workers compensation carriers in the terrorism
risk insurance marketplace.
(2) Report.--The Secretary shall submit a report to
the Congress setting forth the findings and conclusions
of each study required under paragraph (1).
* * * * * * *
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
DISSENTING VIEWS
Too often, Congress reflexively renews sprawling federal
backstops that the market no longer needs--quietly gambling
with taxpayers' exposure to potentially massive losses while
ignoring the absence of any real market breakdown. This TRIA
reauthorization fits the pattern perfectly: another automatic
green light for an open-ended federal guarantee, despite no
evidence of a genuine market failure.
I think it's important to recall exactly what Congress
intended when it created the Terrorism Risk Insurance Act, or
TRIA. The statute laid out that the program was established as
`` . . . a temporary federal program that provides for a
transparent system of shared public and private compensation
for insured losses resulting from acts of terrorism, in order
to (1) protect consumers by addressing market disruptions and
ensure the continued widespread availability and affordability
of property and casualty insurance for terrorism risk; and (2)
allow for a transitional period for the private markets to
stabilize, resume pricing of such insurance, and build capacity
to absorb any future losses, while preserving State insurance
regulation and consumer protections.''
That's the law's own language--and the key phrase here is
``temporary federal program.'' TRIA was never meant to be
permanent. It was designed to give the private market time to
adjust, mature, and ultimately take full responsibility for
insuring against terrorism risk. Yet here we are, twenty plus
years later, marking up another long-term reauthorization that
continues to rely on federal involvement instead of
meaningfully reducing it.
I have great respect for my colleagues who have worked hard
on this proposal, but I believe that H.R. 7128 misses an
opportunity. Rather than putting TRIA on a path toward less
government exposure and greater private-sector responsibility,
this bill extends the federal backstop until December 31,
2034--nearly nine years from now. That's hardly consistent with
the statute's intent of providing a ``transitional'' program.
I also believe that H.R. 7128 violates the spirit--if not
the letter--of the House Republican floor protocols for the
119th Congress, particularly the requirement that federal
programs be subject to a sunset ``not later than seven years''
after spending is first authorized or continued. Under Section
2, H.R. 7128 does not merely ``add seven years'' to a distant
end date; it strikes ``2027'' and inserts ``2034,'' making this
authorization effective as soon as the bill is enacted and
keeping TRIA in force through the end of 2034.
In my view, the proper way to apply our Conference's seven-
year sunset standard is to measure from when the reauthorized
program actually takes effect--namely, when this bill is signed
into law and TRIA's federal backstop is once again authorized.
In other words, the ``clock'' should start when we newly
authorize or continue the program, not from the old termination
date written in prior law. Viewed that way, characterizing H.R.
7128 as a simple seven-year extension obscures the reality that
Congress would be reauthorizing a significant federal program
for nearly a decade at once, in tension with our Conference's
stated commitment to regular review and reconsideration of
federal spending and backstop authorities.
This is especially concerning given that, to date, TRIA has
never been activated. In the 20 plus years since TRIA was
enacted, there has not been a single Treasury-certified act of
terrorism that met the program's financial trigger. Not once
has the federal government been required to step in under TRIA.
Meanwhile, the private insurance industry has not just done
well in this space--it has thrived under the shelter of a
taxpayer-funded guarantee. According to the Treasury
Department, from 2003 to 2023 insurers collected roughly $56.7
billion in terrorism risk premiums.
That is not the profile of a fragile market in need of
permanent federal protection; it is evidence that insurers have
the experience, capital, and appetite to keep cashing premium
checks while the public absorbs the worst-case downside risks.
In effect, taxpayers provide free reinsurance so that insurance
carriers can book steady revenue and protect record surpluses--
a classic example of privatized gains and socialized risk.
Given this track record, the question is no longer whether
insurance companies can begin to shoulder more of the risk, but
why they have been allowed to avoid doing so for this long.
Yet instead of taking any meaningful steps to scale down
taxpayer exposure or establish a serious glide path for an
eventual federal exit, this bill simply extends the program
nearly as-is. I find that deeply disappointing, because I do
not believe the federal government should be in the business of
permanently backstopping risks that the private sector is
clearly capable of handling on its own.
It did not have to be this way. I offered an amendment that
I believe would have greatly improved this bill by beginning
the long-overdue process of shifting more terrorism risk off
taxpayers and back onto the well-capitalized insurance industry
where it belongs.
First, my amendment would have reduced the federal cost
share. Under current law, the federal government covers 80
percent of covered losses above insurer deductibles. My
amendment would have reset that share to 75 percent and then
ratcheted it down by 1 percentage point a year until it reached
70 percent. This would have created a gradual, predictable
glide path that would give insurers time to adjust while
steadily reducing federal exposure and putting more
responsibility back on the private market where it belongs.
Second, my amendment would have reduced the circumstances
under which taxpayers are forced to step in. Under current law,
the program trigger remains frozen at $200 million. My
amendment would have raised that trigger by $10 million per
year until it reached $250 million, and then indexed it to
inflation using a benchmark selected by the Treasury Secretary
through a rulemaking process. That approach would have kept the
trigger aligned with economic reality instead of shrinking in
real terms and quietly expanding the federal role, ensuring
that more of the risk stays with insurers rather than being
shifted to taxpayers.
Third, my amendment would have shortened the length of the
reauthorization by changing the program termination date to
five years after enactment. Five years provides ample certainty
for markets, but it also respects the fact that TRIA was
supposed to be temporary, and that Congress should regularly
revisit the scope of federal involvement.
Fourth, my amendment would have forced Treasury to do the
serious homework this bill avoids, laying out how, within a few
years, we could dramatically reduce taxpayer risk and make the
industry shoulder a larger share of the costs. It would have
directed Treasury to study how an annual participation fee on
insurers in TRIA could be structured, including options that
generate substantial aggregate fees and deposit them into a
dedicated fund at Treasury that can be used solely to cover
future federal outlays or reimbursements under the program. The
study would have been required to examine fee designs that are
proportionate to insurer size and premiums, so that large
national carriers shoulder the largest share while small and
regional insurers are not disproportionately burdened.
It also would have evaluated whether a carefully designed
opt-out for small insurers from the mandatory availability
requirement could work without undermining the long-term health
of the program. Treasury would then have been required to
report back to this Committee with concrete findings and
legislative options, giving us real data to build a system that
shifts more risk off taxpayers and onto the well-capitalized
insurance companies that benefit from TRIA.
My amendment would not have pulled the rug out from under
anyone; it simply asked the insurance industry to start
standing on its own two feet. It took modest, measured steps to
ratchet down the federal share, raise and index the trigger,
shorten a long-term reauthorization, and finally force a
serious conversation about a participation fee and dedicated
fund that would put taxpayers ahead of industry convenience.
When Congress tells the public a program will be temporary,
we incur more than a procedural obligation--we make a promise.
In TRIA's case, there is no ambiguity about that promise: the
statute itself describes it as a temporary federal program. The
Members of Congress considering this legislation have, in my
view, a covenant with our predecessors who first authorized
TRIA on that basis. To honor that covenant, we must either set
this program on a genuine path of reform, as my amendment would
have done, or have the courage to let it expire. A long-term
extension with only minimal changes does not satisfy that
obligation.
I want to thank Chairman Flood and Chairman Hill for their
leadership and for their efforts to maintain stability in this
space, and I appreciate their willingness to engage in this
important discussion. But when we shrink from doing the
difficult things; when we refuse to challenge an industry all
too eager to cash terrorism insurance premium checks backed by
taxpayers; when we cannot even agree on modest, common-sense
reforms to a backstop that has never once been triggered, we
miss a rare opportunity to leave the terrorism insurance
marketplace stronger and more accountable than we found it. For
all of these reasons, I must oppose H.R. 7128 in its current
form.
Sincerely,
John Rose,
Member of Congress.
[all]