/>iThe Terrorism Risk Insurance Program Reauthorization Act of 2014 (the “Bill”)[1], which would extend the existing terrorism insurance coverage under TRIA, appears that it will now expire as of December 31, 2014 barring further action from Congress. Although the House of Representatives previously passed the Bill on December 10, 2014[2], the Senate failed to pass the measure prior to the end of the 113th Congressional legislative session.[3] The original insurance program was enacted in 2002 (and subsequently extended in 2005 and 2007)[4] after the 9/11 attacks as a backstop to the shortage of terrorism insurance in the private market.[5]
Since TRIA’s passage in 2002, the legislation has been a major boon to real estate and other industries which rely heavily on property/liability insurance to insure their assets against damages from terrorist acts. With the failure of Congress to reauthorize the existing legislation prior to end of the current legislative session, it is likely that the affected insurance markets will be in turmoil.
While it is possible that the new 114th Congress under Republican leadership will take up a new version of the Bill next year, the process may be delayed until existing objections and proposed amendments (which prevented passage in this legislative session) from Senator Tom Coburn, R-OK are addressed.[6]
Accordingly, clients in this healthcare industry who have healthcare-related property/liability insurance policies that will expire as of December 31, 2014 (or soon thereafter) should immediately contact their insurance professionals in order to discuss potential interim options for coverage pending Congress taking up, and hopefully addressing, the issue again in the coming year.
[1] S.2244 113th Congress (2013-2014). https://www.congress.gov/bill/113th-congress/senate-bill/2244
(last accessed 12/17/14 3:31pm EDT)
[2] S.2244 113th Congress (2013-2014). https://www.congress.gov/bill/113th-congress/senate-bill/2244
(last accessed 12/17/14 3:31pm EDT)
[3]http://www.reuters.com/article/2014/12/17/us-usa-congress-insurance-idUSKBN0JV05L20141217
(last accessed 12/17/14 3:31pm EDT)
[4]http://www.treasury.gov/resource-center/fin-mkts/Documents/TRIAasamended-CompositeTextPost.pdf
(last accessed 12/17/14 3:31pm EDT)
[5]http://www.treasury.gov/resource-center/fin-mkts/Documents/TRIAasamended-CompositeTextPost.pdf
(last accessed 12/17/14 3:31pm EDT)
[6]http://www.reuters.com/article/2014/12/17/us-usa-congress-insurance-idUSKBN0JV05L20141217
(last accessed 12/17/14 3:31pm EDT)
