The House Financial Services Committee (HFSC) approved legislation last week aimed at reforming the Terrorism Risk Insurance Act (TRIA) and improving transparency within the Financial Stability Oversight Council (FSOC).
Critics of FSOC, which was established under the Dodd-Frank Act, maintain that the council and its operations lack transparency and have excess authority. Proponents, however, allege that the council’s opponents are trying to eliminate a necessary committee, according to the American Bankers Association.
H.R. 4871, the TRIA Reform Act sponsored by Rep. Randy Neugebauer (R-Texas), reauthorizes the act for another five years. The legislation also seeks to enhance taxpayer protections and encourage private market participation.
TRIA was established after the September 11, 2001 terrorist attacks when insurers stopped offering terrorism risk coverage for commercial customers. The current program is set to expire at the end of the year.
H.R. 4881—also sponsored by Neugebauer—would establish a one-year moratorium on the FSOC’s authority to make determinations regarding financial institutions that could impact overall stability to allow Congress to review the designation process.
Additionally, the committee also approved H.R. 4387, the FSOC Transparency and Accountability Act sponsored by Rep. Scott Garrett (R-N.J.), which aims to make FSOC meetings open to non-members and increase scrutiny of the council’s decisions.