President Would Veto New House Version of Terrorism Bill, Advisors Say
On Tuesday the Administration threatened a veto by President Bush of the revised House of Representatives' version of a bill to extend and expand the U.S. government's terrorism risk insurance program (TRIA).
Unless the bill is renewed by Congress and signed by Bush by December 31, the federal insurance backstop is set to expire. This veto threat may further complicate already difficult negotiations between the House and the Senate and cause the bill not to be renewed.
Major insurers and property development firms are watching closely as Congress wrestles over what to do with the controversial TRI program.
"With the current program set to expire at the end of this year, and millions of commercial insurance policies in the process of renewal beyond that date, it is critical that Congress act by the end of the year," said Dennis Kelly, spokesman for the American Insurance Association, which represents large property-casualty insurance companies.
Viewed as vital to New York City's economy by area lawmakers, TRIA promises federal assistance for private insurers in case of massive claims from a terrorist attack.
But critics of TRIA call it an unneeded subsidy to insurance companies that could afford to cover terrorism risk, but prefer not to, as long as the government will do it.
"The administration believes that the Terrorism Risk Insurance Act should be phased out in favor of a private market for terrorism insurance," a White House statement said.
If the House bill extending and widening TRIA were sent to President Bush as written, "his senior advisors would recommend that he veto the bill," the statement said.
Published on December 12, 2007
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