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US House Votes to Renew Terrorism Insurance Program

  • Reuters

House Speaker John Boehner walks to a closed-door meeting with House Republicans on Capitol Hill, Jan. 7, 2015.

House Speaker John Boehner walks to a closed-door meeting with House Republicans on Capitol Hill, Jan. 7, 2015.

The U.S. House of Representatives voted on Wednesday to reauthorize a federal terrorism insurance program sought by insurers and owners of sports stadiums and shopping malls, after lawmakers let it expire at the end of 2014.

Lawmakers were unable to agree last year on a plan to extend the program, which was created after the Sept. 11, 2001, attacks. The House bill would give the program six more years.

“This will provide much needed certainty to businesses across the country as they expand and create more American jobs,” Representative Carolyn Maloney, a Democrat from New York City, said on the House floor.

The terrorism program was intended to encourage insurers to continue offering protection against assaults on office buildings, malls and sports stadiums after they faced major losses in the wake of the 2001 attacks. It creates a federal backstop that kicks in once insurers lose a certain amount of money.

The program, which has been renewed twice, has never been triggered. However, the promise of federal support in a crisis has allowed developers of construction projects and the owners of large buildings to obtain terrorism coverage at lower costs.

The House passed a similar bill in December that doubles the amount of losses insurers must suffer before the backstop kicks in to $200 million.

U.S. Senators appeared to support extending the program, but got bogged down in disputes over unrelated provisions in the bill. They left Washington without voting, leaving the terrorism insurance program to expire on Dec. 31.

Lobbyists pushing the insurance program were surprised and immediately urged Congress to it the first task when lawmakers returned. The House overwhelmingly approved the bill, voting 416 to 5 in favor.

“We now urge the Senate to reauthorize this important program without delay, to avoid risking economic paralysis and to give American businesses the certainty they need to proceed with new and existing projects,” said Justin Lumadue, head of public affairs at the U.S. Chamber of Commerce.

Senate Majority Leader Mitch McConnell said on Wednesday morning that the Senate would take action on terrorism insurance “quickly” after the House approved its bill.