terrorism insurance law

US House votes to extend terrorism insurance law

Insurers may benefit from extension of terrorism insurance initiative

The U.S. House of Representatives has voted to extend the Terrorism Risk Insurance Act by another six years. The law went into effect in 2002 and has established a federal backstop that provides financial assistance for insurers offering coverage against acts of terrorism. The law has played a major role in ensuring that various industrial and commercial projects have the coverage they need to take form. Over the past year, the law has been the subject of legislative debate, with some lawmakers expressing concern over whether or not it was necessary any longer.

Law will not move on to the Senate for further deliberation

The vote from the House of Representatives will send the matter to the Senate, were federal lawmakers will further debate the future of the Terrorism Risk Insurance Act. Representatives from the insurance industry have been supporting the extension of the law, which is currently set to expire at the end of this year. The law provides the insurance industry with a financial safety net that can protect them from losses associated with acts of terrorism.

Lawmakers have been divided on whether or not to extend the terrorism insurance law

terrorism insurance lawLawmakers have been somewhat divided on the issue of whether or not to extend the law. Some argue that the law is no longer needed because the insurance industry can adequately manage the risks they face in the U.S. Other suggest that the law is necessary to ensure the stability of the insurance market and help commercial and industrial projects take form throughout the country. Federal negotiators have been working on a compromise that may satisfy the concerns that both Republicans and Democrats have about the law.

Revised law also introduces changes to Dodd-Frank Act

Revisions to the Terrorism Risk Insurance Act are being made to satisfy lawmakers. The revised version of the law will ensure that insurers get reimbursement from industry wide losses relating to terror attacks once damages exceed $200 million, up from the original $100 million threshold. Changes to the law will also introduce revised provisions to the Dodd-Frank Act, which will require that the Federal Reserve is managed by someone that has community banking experience.

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