Two competing bills to renew the TRIA program are still awaiting further consideration by the US House of Representatives, which is under Republican leadership.
Although all parties - even those philosophically hostile to TRIA - have conceded that a continuation of the program is necessary, there remains disagreement on the extent to which the government share of the risk should be curtailed.
The House Bill (H.R. 4871) proposes a five year extension with:
- Graduated increase in the co-share from 15% to 20%;
- Graduated increase in program trigger from $100m to $500m;
- "Bifurcation" of program between NBCR and "conventional" terrorism;
- Mandatory recoupment level set at prior year's aggregate insurer deductible
The Senate Bill (S. 2244) proposes a seven year extension with graduated increase in co-share from 15% to 20%, and graduated increase in the mandatory recoupment to $37.5b.
Even with the Republican controlled House of Representatives, the House Bill currently does not have sufficient support to have a realistic chance of passing. There are therefore three main options for progress; the Senate bill, a compromise bill or a short term stop-gap extension to allow continued debate next year.
Industry stakeholders prefer the first option, and are actively lobbying against the possibility of a stop-gap measure. However, the Leader of the House Financial Services Committee, who is largely in a position to determine which option is pursued, currently advocates a stop-gap measure so that he can negotiate more aggressive curtailments next year with a Republican-controlled Senate. Nevertheless, there is significant bipartisan pressure to agree a longer term solution which may be hard to resist.