The program set to expire on December 31 was passed by the House legislature by 360-53.The Senate last month passed a seven-year extension, and the White House is expected to sign the measure into law.
Congress enacted the law after the Sept. 11, 2001, terrorist attacks when businesses ran into trouble insuring against terrorism-related losses. The goal was to provide a temporary federal backstop until a private market developed. But major insurers including American International Group Inc. (AIG) and Travelers Cos. lobbied Congress to keep it going, winning a two-year extension in 2005 after arguing the private market lacked capacity to cover losses from terror attacks.
House and Senate lawmakers have been at loggerheads over the program for months, with Sen. Richard Shelby, R-Ala., especially opposed to extending the program for too long. After the House passed a 15-year extension and expanded the program in several ways, the Senate moved its own bill and then all but refused to negotiate with House counterparts. The House was left with little choice but to accept the Senate's version.
"Today, we're faced with a very difficult reality: We can either accept the Senate's shell of a bill and ensure that our nation's economy is somewhat protected against terrorist attacks, or we could let the program expire altogether," said Rep. Gary Ackerman, D-N.Y. "We must do the responsible thing."
New York is among the biggest beneficiaries of the risk-insurance program, with half of all the insured risk in the country, according to Kathryn Wylde, the president of the Partnership for New York City.
It was the third time this year that the House has voted to extend the terrorism risk-insurance program. In September, the chamber passed a 15-year extension of the program that would have expanded the program to cover group life and other lines of coverage. Later, the House passed a compromise seven- year extension.
But the Senate went ahead with its own seven-year extension that stripped out just about every House attempt to expand the program, such as covering group life and requiring insurers to offer insurance for nuclear, biological, chemical and radiological attacks. The House had also tried to lower the level for federal government involvement to $50 million, but the Senate maintained the $ 100-million threshold.
Even so, the Mortgage Bankers Association and the American Insurance Association applauded House passage of the extension. The MBA said the move would "help stabilize real-estate capital markets."