U.S. Senate votes to renew terrorism insurance program

Published 01/08/2015, 03:25 PM
U.S. Senate votes to renew terrorism insurance program

By Emily Stephenson

WASHINGTON (Reuters) - The U.S. Senate on Thursday voted to extend for six years a federal terrorism insurance program sought by owners and developers of office buildings and shopping malls, after lawmakers allowed it to lapse at the end of 2014.

Senators voted 93 to 4 to renew the program, which was created following the Sept. 11, 2001, attacks. Lawmakers failed to extend it before the program expired last year, so they scrambled to reauthorize it quickly after returning to Washington this week.

The U.S. House of Representatives approved the plan on Wednesday. President Barack Obama, who must sign it for it to become law, is expected to do so.

"Millions of Americans can breathe a sigh of relief, not just those who insure buildings and build buildings, but people who work in buildings," said Senator Chuck Schumer, a New York Democrat.

Congress created the program to encourage insurers to offer terrorism coverage for big buildings, sports stadiums and shopping malls. It establishes a federal backstop that kicks in if insurers lose a certain amount of money after an attack.

The program has been renewed twice before but has never been needed. The bill approved on Thursday doubles to $200 million the losses insurers must suffer before the backstop kicks in.

Lawmakers expected to pass the same bill at the end of 2014 but got sidetracked by debates over unrelated provisions.

Liberal Democrats on Thursday unsuccessfully tried to remove a provision that changes the 2010 Dodd-Frank law by exempting farmers, ranchers and other "end users" of derivatives from certain margin requirements.

"If Republicans want to try to roll back financial reforms, let's have that debate on the merits of each proposal," said Senator Elizabeth Warren of Massachusetts. "But we cannot have that debate if we permit Republicans to attach financial reform rollbacks to must-pass pieces of legislation."

Most Republicans and several Democrats supported the end users change and said it was a technical tweak backed by regulators.

"Certain Democrats seem to think they have the moral authority to cripple Main Street in order to occupy Wall Street," House Financial Services Committee Chairman Jeb Hensarling said in a statement on Thursday.

The terrorism bill also makes it easier for insurers to operate across state lines and calls for community bank representation on the U.S. Federal Reserve's board.

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