HR 2146 Introduced – Terrorism Insurance

As I noted in an earlier blog post, Rep. Capuano (D,MA) introduced HR 2146, the Terrorism Risk Insurance Program Reauthorization Act of 2013. This is the third bill introduced this session that would extend the Terrorism Risk Insurance Act (TRIA) of 2002 (15 U.S.C. 6701 note). The earlier bills were HR 508 and HR 1945.

Comparison of Bills

All three of the bills would modify the dates for:

• Additional Program Years {§102(11)(G)};

• Timing Of Mandatory Recoupment {§103(e)(7)(E)(i)(III)}; and

• Termination Date {§108(a)}

Additionally, two of the bills (HR 1945 and HR 2146) would also modify Ongoing Reports Regarding Market Conditions For Terrorism Risk Insurance {§108(e)(2)}. The table below shows the date in the current law that would be changed and what change each bill would make.

	Current	HR 508	HR 1945	HR 2146
§102(11)(G)	2014	2019	2024	2024
§103(e)(7)(E)(i)(III)	2017	2024	2024	2027
§108(a)	2014	2019	2024	2024
§108(e)(2)	2013		2013, 2017 2020, and 2023	2013, 2017 2020, and 2023

Problems

The current bill corrects one of the problems that I noted in HR 1945. It changed the timing of the mandatory recoupment of premium until three years after the date of the last potentially covered terrorist attack. The language in HR 1945 could potentially have required the recoupment of premiums before monies were actually paid out for an attack that occurred in 2024.

This bill has the same problem at the previous two bills in that it does not provide for any intermediate recoupment dates for any terrorist attacks that occur between 2012 and the new termination date. The table below shows how the current language provides for intermediate recoupment dates

For terrorist attacks	Recoupment Date
Before 12-31-10	9-30-12
01-01-11 to 12-31-11	9-30-12 Partial 9-30-17 Remainder
After 01-01-12	9-30-17

A staggered recoupment period for the out years could be structured like this:

• Attacks in 2013 and 2014 would have funds recouped by 2017;

• Attacks in 2015 and 2016 would have funds recouped by 2019;

• Attacks in 2017 and 2018 would have funds recouped by 2021;

• Attacks in 2019 and 2020 would have funds recouped by 2023;

• Attacks in 2021 and 2022 would have funds recouped by 2025; and

• Attacks in 2023 and 2024 would have funds recouped by 2027.

Moving Forward

Of the three bills currently dealing with an extension of TRIA, it still looks like HR 508 will have the best chance to move forward through the legislative process. It has 41 sponsors (vs 20 for this bill) and HR 508 has more bipartisan support, looking at the affiliation of the sponsors. I don’t think that there would be any significant opposition to this bill in a floor vote in either chamber. I am a little surprised that there hasn’t been a hearing before the House Financial Services Committee on HR 508 yet.