The Terrorism Risk Insurance Act, first passed after the Sept. 11 attacks made private policies scarce, promises to reimburse insurers if another major attack occurs. The Senate bill, approved Wednesday by the Banking Committee, 20-1, would extend the law until 2014 and include acts of domestic terrorism. The Bush administration said it would back the Senate bill after threatening to veto the House version.
This bill will address the long-term security needs of our people and our economy," said Senate Banking Committee Chairman Christopher Dodd, D-Conn. "The need to extend this program is clear. Nearly all the experts say that the insurance industry alone cannot insure against this risk."
The House version also covers attacks by homegrown extremists while extending the subsidy for 15 years. Insurers would be required to sell protection against nuclear and other unconventional attacks and would qualify for partial reimbursement if they had to pay large enough claims on the policies. The Senate bill requires the Government Accountability Office to study whether the government should offer the coverage.
U.S. Treasury Secretary Henry Paulson said in a letter that the administration would not veto the Senate bill, though it favored a shorter extension and wanted the federal program "phased out in favor or a private market for terrorism insurance."