(Adds Hensarling comments)
By Emily Stephenson
WASHINGTON, July 17 The U.S. Senate voted
overwhelmingly on Thursday to reauthorize a federal terrorism
risk insurance program that was created after the Sept. 11,
Senators voted 93-4 in favor of a bill that gives the
federal insurance backstop seven more years. Businesses, owners
of sports stadiums and other groups that insure against the risk
of terrorist acts have urged lawmakers to renew the program
before it expires at the end of the year.
"In a post-9/11 New York, terrorism risk insurance has
proven to be an absolutely essential partnership between the
government and the private sector that has turned rebuilding
downtown Manhattan from a question to a certainty," Senator
Chuck Schumer, a New York Democrat and one of the bill's
sponsors, said in a statement after the vote.
The extension needs to be approved by the U.S. House of
Representatives, which has struggled to agree on a
The program was established after the 2001 attacks, when
insurers suffered steep losses and some stopped offering
terrorism risk insurance on commercial buildings.
Congress stepped in with the Terrorism Risk Insurance Act,
or TRIA. Under the program, insurers must offer certain types of
terrorism risk coverage. If losses from an attack exceed a set
amount, the federal backstop kicks in. The program has been
TRIA's renewal faces a tougher hurdle this year in the
House, where conservatives, including Representative Jeb
Hensarling of Texas, have argued for winding down the program.
Hensarling's Financial Services Committee voted to give the
program five more years and to increase the amount of losses
needed to trigger the federal backstop. But many Democrats and
some Republican backers of TRIA have opposed those changes.
House leaders on Thursday said an extension bill could go
before the full body as soon as next week. But Hensarling said
it would take more time to agree.
"I'm still committed to getting a bill passed, but it has
become very clear this week that the process is going to take
several more months before there is a resolution," he said.
The White House said it supported the Senate bill.
The Senate legislation includes an amendment to the TRIA
bill that would require the U.S. Federal Reserve to have at
least one board member with community bank experience.
Small banks have complained that parts of the 2010
Dodd-Frank oversight law place too much burden on them and that
regulators do not understand their business models.
Lawmakers from both parties have sided with the small banks,
urging the White House to nominate a community bank expert to an
open Fed seat.
"The Fed's role in bank supervision has greatly expanded,
but Fed membership has dramatically shifted away from community
bank experience and toward academic and economist experience,"
said Senator David Vitter, a Louisiana Republican who introduced
the Fed amendment.
The Senate also approved an amendment to create an
organization that would allow agents to sell insurance across
state lines more easily.
(Reporting by Emily Stephenson; Editing by Doina Chiacu and Dan