A bill that would extend the Terrorism Risk Insurance Act (TRIA) for an additional seven years has been passed by the US House of Representatives with a vote of 385-22. The TRIA program was first created following the terrorist attacks of September 11, 2001, and has been reauthorized three times since in 2005, 2007, and 2015.
The reauthorization bill was first introduced in the House on October 11, 2019, and was referred to the House Committee on Financial Services, which introduced and passed an amended version.
A companion bill was introduced in the US Senate on November 14, 2019, and is scheduled for a hearing by the Senate Banking, Housing, and Urban Affairs Committee on November 20, 2019.
The National Association of Professional Insurance Agents (PIA National) has issued a statement in support of the bill’s passage.
“The House passage of TRIA over a year in advance of its expiration is a breath of fresh air and will be welcomed by policyholders and the market,” said Jon Gentile, PIA National Vice President of Government Relations.
Without the extension, the TRIA program would expire on December 31, 2020.
The US House Financial Services Committee unanimously voted to pass an amended version of the Terrorism Risk Insurance Program Reauthorization Act of 2019 on Thursday, October 31, 2019, which would extend the Terrorism Risk Insurance Act of 2002 (TRIA).
The amended bill will require a report by the U.S. Government Accountability Office on cyber terrorism risks and Treasury reporting with disaggregated data on places of worship. The amendment also extends the bill for seven years instead of the originally proposed 10 years.
The American Property Casualty Insurance Association (APCIA) has spoken out in support of the bill’s passage.
“We applaud Chairwoman Waters, Ranking Member McHenry, and the House Financial Services Committee for making TRIA reauthorization a top priority,” ACPIA said in a statement. “The risk of terrorism is still very real, and the TRIA program is still needed to promote economic stability both before and after an attack. We urge the full House to take up and pass this bill quickly.”
TRIA in its current form will expire in December 2020. The extension bill will next be recommended for consideration by the full US House.
Congresswoman Maxine Waters has introduced a bill in the US House of Representatives to reauthorize the Terrorism Risk Insurance Act (TRIA) until December 2030. The act is currently scheduled to expire on December 31, 2020.
The bill, H.R. 4634, was introduced on October 11, 2019, and was considered by the Housing, Community Development, and Insurance Subcommittee, a part of the US House Committee on Financial Services, on October 16, 2019.
TRIA was enacted following the September 11, 2001, terrorist attacks in the US. The bill created a federal backstop for terrorism insurance to keep coverage affordable in the event of another attack. The act has been reformed over time so that the private sector would bear 100% of the losses if another terrorist event like September 11 occurred.
“Nearly two decades after TRIA was enacted, TRIA has thankfully never been triggered, and the program is working as intended, effectively protecting our economy from the costs of a terrorist attack and providing security for many of our nation’s hospitals, stadiums, schools and small businesses,” said Waters, Chairwoman of the House Financial Services Committee.
The bill is sponsored by 27 other representatives and is supported by more than 300 organizations, including the American Property Casualty Insurance Association (APCIA).
“We applaud Chairwoman Waters for introducing a bipartisan bill that would reauthorize TRIA for ten years in its current form,” said David Sampson, president and CEO of the APCIA, in a statement. “We urge Congress to take up and pass H.R. 4634 as soon as possible.”
Following its subcommittee hearing, Waters said that she intends to move forward with full committee consideration of the bill at a markup in October before working to bring it to the floor.
A law passed unanimously by the Texas Legislature regarding continuing education requirements for insurance adjusters will take effect on September 1, 2019.
SB 1584 provides that the Texas Department of Insurance (TDI) will accept claims certifications that the adjuster receives during a license period for continuing education credit if:
- The claims certification is issued by a national or state claims association with a certification program;
- The number of hours required to complete the certification program is not less than the number of hours of continuing education that an adjuster is required to complete during the license period;
- The content of the certification program includes:
- Content required under Texas law, and
- Is made available through an electronic portal maintained by the association for review and audit by TDI;
- The association is approved by TDI as a continuing education provider;
- The association reports the adjuster’s completion of the certification program to TDI through an electronic portal maintained by the department; and
- The association provides TDI access to the adjuster’s transcript showing the adjuster’s completion of the certification program.
Though the law takes effect in September 2019, it applies to continuing education requirements for an insurance adjuster’s license period beginning on or after January 1, 2020. More information about continuing education requirements can be found on the TDI website.
A bill that will allow eligible surplus lines insurers to provide windstorm and hail insurance, notwithstanding available coverage through the Texas Windstorm Insurance Association (TWIA), has passed into law in Texas, effective June 14, 2019. Under the law, a diligent effort will still be required, but available TWIA coverage will not limit the amount of insurance that can be procured in the surplus lines market.
HB 1940 easily passed both the Texas House of Representatives and Texas Senate during the 86th legislative session before it was sent to Gov. Greg Abbott on May 24, 2019. Gov. Abbott signed the bill on June 14, 2019, and it became law.
The bill amends Texas Insurance Code, Chapter 981, Section 981.004, related to authorized surplus lines coverage. The bill became effective immediately as it received at least two-thirds votes from members of each legislative chamber and was signed by the Governor on June 14, 2019.
Rep. Eddie Lucio III, sponsor of the bill, has noted that there is confusion in the market as to whether surplus lines insurers may lawfully provide coverage to those in TWIA’s coverage area. With HB 1940’s passage, it is clear that eligible surplus lines insurers may provide insurance to these consumers, without regard to the availability of TWIA coverage. This may expand windstorm and hail insurance coverage in the state and lead to increased options for Texas insureds.
A bill passed by the Texas Legislature this session that creates a diligent effort exemption for flood insurance policies in the surplus lines market has been signed by Gov. Greg Abbott. The bill, HB 1306, will take effect September 1, 2019, for any new or renewal policies issued on or after January 1, 2020. A diligent effort will still be required of agents for flood insurance policies whose policy period begins before January 1, 2020.
Under the new law, surplus lines agents are not required to conduct a diligent effort search to obtain flood insurance through the admitted market before placing it in the surplus lines market. However, the law does require that the eligible surplus lines insurer issuing the coverage has a financial strength rating of A- or better from the A. M. Best Company.
During the 86th legislative session, the bill was passed easily by both the Texas House of Representatives and the Texas Senate. The goal of the new law is to expand access to flood insurance in the private market, which offers alternatives to the National Flood Insurance Program.
A bill to improve flood insurance affordability has been introduced in Congress by Congressmen David Scott and Sean Duffy, of Georgia and Wisconsin, respectively. H.R. 3146, or the Fair Flood Insurance Act, would provide consumers with the option to pay flood insurance premiums monthly instead of as a single large payment.
Scott and Duffy both serve as members of the House Financial Services Committee, which has jurisdiction over insurance matters. The bill was first introduced on June 5, 2019, and has not yet been considered by committee, nor the House or Senate as a whole.
“My legislation is designed to ease the financial barriers many homeowners face when purchasing necessary flood insurance to protect their homes,” Scott said. “While we don’t know when the next storm will hit, we must ensure that homeowners and renters do not drown in the financial aftermath. The Fair Flood Insurance Act will make insurance more affordable and financially empower consumers to protect their homes and families.”
After 140 days, the Texas Legislature adjourned the 86th legislative session on Monday, May 27, 2019. Overall, more than 4,500 bills and resolutions were passed by the state Senate and House of Representatives.
Two bills of interest that impact the surplus lines industry were passed, while others were reviewed but did not make it through the legislature before session ended. HB 1306, which creates a diligent effort exemption for flood insurance issued by an eligible surplus lines insurer with a financial strength rating of A- or better from the A.M. Best Company, was easily passed by both chambers. It was sent to the governor’s office and will take effect September 1, 2019. HB 1940, a bill allowing eligible surplus lines insurers to provide windstorm and hail insurance, even if coverage is available through TWIA, was also passed easily and will take effect September 1, 2019.
HB 1648, which would require arbitration under a surplus lines insurance contract covering a Texas risk to be conducted in Texas, was placed on the House’s calendar but was never voted on in either chamber. Additionally, HB 3076 was not heard in committee and did not progress through the legislature. That bill would have created the Texas Tornado and Wildfire Insurance Association, an insurer of last resort for tornado and wildfire coverage.
The Texas House of Representatives has passed a bill that would pull more than $3 billion from the state’s rainy-day fund to pay for flood control projects.
At the beginning of this year’s legislative session, SB 7 was one of Lt. Gov. Dan Patrick’s 30 priority bills for 2019. The bill was passed by the Senate in March and taken up by the House last week. An amendment by Rep. Dade Phelan combines the Senate’s version with a House alternative, creating two funds that will provide grants and loans for flood control and mitigation projects.
The funds created would be the Flood Infrastructure Fund, which would assume $3.3 billion from the state’s Economic Stabilization Fund, and the Texas Infrastructure Resiliency Fund, which would allow cities and counties to apply for grants or low-interest loans for projects through the Texas Water Development Board.
As the last day of the 86th Texas Legislature approaches, the Texas Senate passed two (2) bills that will both impact and solidify the surplus lines industry expansion within the flood, hail and wind arenas.
HB 1306 will create a diligent effort exemption for flood insurance coverage for eligible surplus lines insurers who have a financial strength rating of A- or better from the A.M. Best Company.
HB 1940 states that available coverage from the Texas Windstorm Insurance Association (TWIA) does not preclude an eligible surplus lines insurer from providing windstorm and hail insurance.
Both laws were voted on by the Senate on Monday, May 20, 2019, after first being passed by the state House of Representatives. Each act is set to take effect on September 1, 2019. As the Senate did not make amendments to either bill, they will now be sent to the Governor, who has until Sunday, June 16, 2019, to sign, veto, or allow them to pass into law without a signature.