US terrorism insurance bill killed by objections in Senate

A bill to extend an expiring federal terrorism insurance program effectively died on Tuesday when the US Senate failed to reach an agreement to hold a vote before Congress wraps up its business for the year.

Reuters| Last Updated: Dec 17, 2014, 10:09 AM IST

Washington: A bill to extend an expiring federal terrorism insurance program effectively died on Tuesday when the US Senate failed to reach an agreement to hold a vote before Congress wraps up its business for the year.

The program, created after the Sept. 11, 2001 attacks that provides a federal insurance backstop for owners of skyscrapers, sports stadiums and other large projects that could face terrorism threats, will likely lapse at year-end.

Congress will need to reintroduce the measure in January in both the Senate and House of Representatives.

Senate Majority Leader Harry Reid said the bill was "killed" because retiring Oklahoma Republican Senator Tom Coburn had wanted to make last-minute changes and would not drop his objections. 

"We all know if we change the bill, it`s gone," Reid said on the Senate floor, adding that any changes would mean that it would have to be sent back to the House of Representatives.

The House passed the measure last week, but has left Washington for a holiday break until Jan. 6.

"They`re gone, they`re not going to change anything in the bill. We`ve been told that many times," Reid said.

In a final act as a Senator, Coburn had objected to a section of the bill that creates a licensing program to allow insurance agents to sell across state lines.

Coburn said he wanted states to be able to opt out of the program and wanted the measure to expire in two years. The House-passed bill would extend the Terrorism Risk Insurance Act for six years and double the threshold for losses at which the backstop kicks in to $200 million.

Lawmakers created the terrorism insurance program after the 2001 attacks, when insurers lost money and threatened to stop offering insurance against the chance of similar attacks. 

The program has enabled developers of large projects such as shopping malls to build and gain coverage at lower costs. The federal backstop has never been triggered.

House Republicans included in the bill language tweaking the 2010 Dodd-Frank financial oversight law to exempt ranchers, energy businesses and other so-called "end users" of derivatives from certain requirements.

Many Democrats, who lost a battle last week over including Dodd-Frank changes in a $1.1 trillion government spending package, were bitterly opposed to changing the law again in the terrorism bill.

The White House had said it opposed including Dodd-Frank modifications in an unrelated bill but stopped short of threatening to veto the insurance extension.