President Obama signed into law a six-year extension to the Terrorism Risk Insurance Act on Monday night, putting to rest months of debate over the program.
The House and Senate quickly approved the legislation earlierir this month, after the bill failed late last year when Sen. Tom Coburn, R-Okla., who retired at the end of 2014, blocked it over objections to an unrelated provision.
"A well-functioning private terrosm insurance marketplace has been preserved because Congress and the Administration made TRIA's reauthorization an immediate priority," said Leigh Ann Pusey, president and chief executive of the American Insurance Association, in a statement. "The program, which has overwhelming bipartisan support, will continue to protect our nation's economy against major acts of terrorism."
Democrats and some Republicans in metropolitan areas had been advocating for reauthorization of the law for months, while more conservative lawmakers argued the government should remove its backstop for insurers in the wake of a catastrophic attack.
The final bill extends the program, but also makes some changes to its structure, including doubling the trigger from $100 million to $200 million in losses before the program takes effect.
The legislation also includes several amendments. The law authorizes the creation of a National Association of Registered Agents and Brokers, which Coburn objected to when lawmakers removed a two-year sunset provision, and removes Dodd-Frank Act margin requirements for certain end-users, like utilities and manufacturers, involved in derivatives trading to hedge risk. Sen. Elizabeth Warren, D-Mass., tried to remove the end-users rollback from the bill during voting last week, but her measure failed.
The TRIA reauthorization also mandates that the Federal Reserve have at least one governor with community banking or supervision experience. Obama recently nominated Allan Landon, former chief executive of the Bank of Hawaii, to the Fed Board, but community banking advocates argue the new requirement is another good step.
"ICBA strongly supports this new law ensuring the board always includes the voice of the community banking industry," John H. Buhrmaster, president and chief executive of 1st National Bank of Scotia, N.Y., and chairman of the Independent Community Bankers of America, said in a press release.