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TRIA renewal

Two competing bills to renew the TRIA program are still awaiting further consideration by the US House of Representatives, which is under Republican leadership.

Thu 27 Nov 2014

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.