Terror insurance renewal seen via Senate bill

Dec 14, 2007

Reuters, 12/14/2007

WASHINGTON (Reuters) – A post-Sept 11, 2001 federal terrorism risk insurance program is likely to be extended next week for seven years along lines proposed by the Senate, said sources familiar with the matter on Friday.
Set to expire on December 31 unless renewed, 2002’s Terrorism Risk Insurance Act (TRIA) program pledges government assistance for private insurance companies hit by massive property damage claims following a terrorist attack.

The program’s fate has been uncertain up to the last minute due to a dispute between the Senate and the House of Representatives, which has its own proposal for TRIA that would not only extend it, but greatly expand its scope, as well.

‘We do not expect the Senate to budge and we expect the House next week will approve the Senate version verbatim,’ said Jaret Seiberg, a financial services industry analyst at the Stanford Group Co., an investment research group.

Seiberg cautioned that House Democrats could further challenge their counterparts in the Senate over the bill.

But lobbyists said this was unlikely and speculated that the Senate bill could clear the House as soon as Tuesday.

Insurers, real estate developers and real estate investment trusts with interests in major cities, such as New York, Chicago and Los Angeles, would benefit from renewing TRIA.

Major insurers such as State Farm, Travelers Cos Inc, Allstate Corp, Chubb Corp, CNA Financial Corp and Nationwide Financial Services Inc are keenly watching the fate of TRIA, lobbyists said.

The Senate’s bill would extend TRIA for seven years, widen it to cover domestic, as well as foreign attacks, and make few other changes to the program.

(Reporting by Kevin Drawbaugh; Editing by Derek Caney)