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WASHINGTON, DC-It’s back. Congressional discussions of the importance of terrorism risk insurance, that is. The Terrorism Risk Insurance Act, originally enacted in 2002 after the attacks of 9/11, has been amended and extended twice. Now it is set to expire at the end of next year, and the Coalition to Insure Against Terrorism is lobbying for an extension.
CIAT is a business association that includes other trade groups representing such broad-based industries as real estate, entertainment and manufacturing. NAREIT and the Real Estate Roundtable are the commercial real estate industry’s CIAT liaisons.
CIAT has now come out with an endorsement of House legislation to extend the act for another five years. The legislation (HR 508) is being floated by Rep. Michael Grimm (R-NY) and nine bipartisan co-sponsors.
“TRIPRA [the Terrorism Risk Insurance Program Reauthorization Act of 2007] and its predecessor legislation provide a federal reinsurance public-private risk-sharing mechanism without which private terrorism risk insurance coverage would not be commercially available, as was the case following 9/11,” says CIAT coordinator Martin DePoy. “The absence of terrorism risk insurance would cripple the still-recovering real estate economy, disrupt construction and likely produce job losses in numbers equal to or greater than those that resulted from 9/11.”
DePoy explains that the original 2002 Act has been extended twice, in 2005 for another two years and again in 2007 for an additional seven. “The current federal terrorism risk insurance program has been a tremendous success,” CIAT said in a recent letter to Grimm. “At almost no cost to the taxpayer, the program has made it possible for more than a decade for businesses to purchase terrorism risk coverage,” he wrote.
“TRIPRA has helped keep the economy going in the face of continued terrorist threats by allowing businesses across America to secure this commercially necessary product, saving countless jobs in the process. It has stabilized the terrorism insurance marketplace and restored insurance capacity to an enormous portion of the US economy, thereby ensuring economic continuity critical to the nation’s overall security.”
CIAT also noted that studies by the Government Accountability Office and other groups “have consistently concluded that acts of terrorism are uninsurable risks.” Expiration of the act “would leave policyholders and taxpayers exposed and unprotected, just as they were after 9/11.”