Tags: House | TRIA | insurance | bank

House Takes Up TRIA and Dodd-Frank

By    |   Thursday, 08 Jan 2015 09:55 AM

Almost off the radar of the Mainstream Media, at its first legislative session the day after being sworn in, the House of Representatives voted nearly unanimously to extend the Terrorism Risk Insurance Act (TRIA) of 2001 for six years and to amend some of its complex features in the direction of reducing the portion of terror risk that will be borne by taxpayers during the period.

Virtually everyone who follows this issue would agree that the extension is taking longer than expected. Even now, there was some thought that the Senate might act this week, but Senate action might take a couple weeks longer in view of other priorities set by Majority Leader Mitch McConnell, R-Ky.

Along with the extension of TRIA, the bill, H.R. 26, includes a controversial provision that the industry has sought for many years — to establish a National Association of Registered Agents and Brokers (NARAB) to streamline the registration of so-called "producers" so that they only have to meet the requirements of their home state in order to conduct a multi-state business. Much of the controversy lies in the insistence by the industry that it be regulated solely by the states as provided by the McCarran-Ferguson Act of 1945.

Whenever federal regulation of insurance becomes a reality, as advocated principally by the life insurance industry, which seeks a federal charter as an alternative organizational format, the NARAB provision would be recognized as a major step toward that result.

Two other points are noteworthy. First is the fact that Congress took its time in extending TRIA in spite of dire predictions in hearings last year of consequences to the economy if TRIA were not extended before it would expire at the end of 2014. Hundreds of thousands of sports fans openly attended events in landmark sports stadiums on Jan. 1 knowing, so to speak, that Congress had not acted on TRIA. Second is that the insurance industry had pushed hard for a permanent extension of TRIA but came up a year short of the seven years it was extended in 2007. Originally TRIA was supposed to be a "temporary" measure to enable the industry to recover from the attacks of 9/11 and devise a system for funding terrorism insurance.
Citizens could take some satisfaction from the brave resolve displayed by their legislators, but not so fast.

Everyone who follows banking regulation has known that the industry would make a strong push under the new Republican Congress to continue the dismantlement, or "limplementation," of the Dodd-Frank Act that this writer predicted before it was enacted in 2010. However, few probably expected that the House would move on its very first day on H.R. 37, a package of 11 measures, mostly left over from last Congress. Rep. Jeb Hensarling, R-Texas, expressed dismay that most Democrats refused to go along, and while the bill won a majority of 276-146, it fell short of the 289 votes required under a procedure known as "suspension of the rules."

Ultimately the leadership will presumably have the votes it needs to prevail, and this vote will fade into distant memory. One of the biggest advantages the Majority enjoys is the ability to bring up legislation at the most favorable time and under the most favorable circumstances. Presumably the purpose of this tactic was to serve notice that these proposals, plus a few more, are at the top of the Financial Services Committee's agenda for this year.

(Following are links to the press release on TRIA and pertinent information on the Dodd-Frank amendments.)

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Robert-Feinberg
Almost off the radar of the Mainstream Media, at its first legislative session the day after being sworn in, the House of Representatives voted nearly unanimously to extend the Terrorism Risk Insurance Act (TRIA) of 2001 for six years.
House, TRIA, insurance, bank
589
2015-55-08
Thursday, 08 Jan 2015 09:55 AM
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