King: Terrorism insurance act renewal stalls in House, worrying NY businesses
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WASHINGTON -- The reauthorization of the Terrorism Risk Insurance Act won't be brought up in the U.S. House until September at the earliest, creating a new worry for New York businesses, said Rep. Peter King (R-Seaford) Thursday.
The renewal of the act, which expires at the end of the year, has stalled in the House amid election-year politics and internal Republican struggles, despite broad-based business support and the Senate's overwhelmingly bipartisan 93-4 vote a week ago for a seven-year extension of the act.
The failure of the Republican-controlled House to take up the bill before Congress leaves a week from Friday for a five-week August recess alarmed top New York businesses that rely on the act, known as TRIA.
"We have major employers in New York that are facing the need to extend their insurance policies now, and at this point, it's extraordinarily difficult without an extension of TRIA," said Kathryn Wylde, executive director of Partnership for New York City, the city's top business group.
The act was passed in 2002 after the massive claims on insurance for property damage from the 9/11 attacks made private insurers reluctant to write policies in cities at risk for major acts of terrorism.
Under the act, the federal government would pay 85 percent and private insurers 15 percent of the claims from a terrorist attack if the insured damage totaled $100 million or more. It has never been used.
Since the act went into effect, about 60 percent of commercial insurance policyholders have bought terrorism insurance and premiums for it have trended downward, according to the Congressional Research Service.
TRIA supporters credit it with fostering the rebuilding of lower Manhattan since 9/11 by providing economic certainty.
The House Republican clash over the act exposes a fault line between mainstream and ideological conservatives.
The U.S. Chamber of Commerce; top Long Island businesses such as Nikon, Henry Schein and Estee Lauder; and major sports and business groups across the country back the Senate version of the bill.
But fiscally conservative groups such as the Heritage Foundation and Club for Growth oppose TRIA, which Heritage called "corporate welfare" that burdens taxpayers.
Stalling TRIA in the House is Rep. Jeb Hensarling (R-Texas), a staunch fiscal conservative and chairman of the Finance Committee, who said it will take "several months" to resolve the difference between his House bill and the Senate bill.
The key sticking point, King and Wylde said, is the amount of insured damage from a terrorist act required to trigger the program into action.
The Senate bill keeps the threshold at $100 million for all terrorism, but the House bill raises it to $500 million for all terrorism except for nuclear, radiological, chemical or biological attacks.