WASHINGTON, DC—To the delight but not great surprise of onlookers, the Senate reauthorized the expiring Terrorism Risk Insurance Act for seven years in a 93-4 vote on Thursday.
Passage of the bill and its sister legislation in the House of Representatives is essential for the commercial real estate industry, Real Estate Roundtable CEO Jeff DeBoer says. Without it, owners will either go into technical default on existing loans if they lack terrorism coverage, or be unable to obtain financing for new projects.
The next stop is the House of Representatives, and then presumably the formation of a joint committee to reconcile the two versions. There is a behind-the-scenes power struggle in the House, according to Politico, among the GOP regarding the bill with some factions agitating for less backstop support for the coverage and others pushing to keep the trigger at $100 million.
The insurance industry – a sector known for its skill in evaluating risk – for its part, appears to be more relaxed about the passage this time around, according to an analysis by Marsh that was reported in CFO.com. The demand for policy exclusions of terrorism coverage if the law sunsets “has subsided for insurers,” according to comments made by Duncan Ellis, the property insurance leader for Marsh, during a webcast on Thursday on which the publication reported.