U.S. Senate votes to extend terrorism
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[July 18, 2014]
By Emily Stephenson
WASHINGTON (Reuters) - The U.S. Senate
voted overwhelmingly on Thursday to reauthorize a federal terrorism risk
insurance program that was created after the Sept. 11, 2001, attacks.
Senators voted 93-4 in favor of a bill that gives the federal
insurance backstop seven more years. Businesses, owners of sports
stadiums and other groups that insure against the risk of terrorist
acts have urged lawmakers to renew the program before it expires at
the end of the year.
"In a post-9/11 New York, terrorism risk insurance has proven to be
an absolutely essential partnership between the government and the
private sector that has turned rebuilding downtown Manhattan from a
question to a certainty," Senator Chuck Schumer, a New York Democrat
and one of the bill's sponsors, said in a statement after the vote.
The extension needs to be approved by the U.S. House of
Representatives, which has struggled to agree on a reauthorization
The program was established after the 2001 attacks, when insurers
suffered steep losses and some stopped offering terrorism risk
insurance on commercial buildings.
Congress stepped in with the Terrorism Risk Insurance Act, or TRIA.
Under the program, insurers must offer certain types of terrorism
risk coverage. If losses from an attack exceed a set amount, the
federal backstop kicks in. The program has been reauthorized twice.
TRIA's renewal faces a tougher hurdle this year in the House, where
conservatives, including Representative Jeb Hensarling of Texas,
have argued for winding down the program. Hensarling's Financial
Services Committee voted to give the program five more years and to
increase the amount of losses needed to trigger the federal
backstop. But many Democrats and some Republican backers of TRIA
have opposed those changes.
House leaders on Thursday said an extension bill could go before the
full body as soon as next week. But Hensarling said it would take
more time to agree.
"I'm still committed to getting a bill passed, but it has become
very clear this week that the process is going to take several more
months before there is a resolution," he said.
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The White House said it supported the Senate bill. The Senate
legislation includes an amendment to the TRIA bill that would
require the U.S. Federal Reserve to have at least one board member
with community bank experience. Small banks have complained that
parts of the 2010 Dodd-Frank oversight law place too much burden on
them and that regulators do not understand their business models.
Lawmakers from both parties have sided with the small banks, urging
the White House to nominate a community bank expert to an open Fed
"The Fed's role in bank supervision has greatly expanded, but Fed
membership has dramatically shifted away from community bank
experience and toward academic and economist experience," said
Senator David Vitter, a Louisiana Republican who introduced the Fed
The Senate also approved an amendment to create an organization that
would allow agents to sell insurance across state lines more easily.
(Reporting by Emily Stephenson; Editing by Doina Chiacu and Dan
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