Terrorism Insurance Congressional Conferees in Place

WASHINGTON, DC-Congress moves forward on terrorism insurance legislation with the selection of conferees who will come together in an effort to make the US House of Representatives’ version of the bill and the US Senate’s version palatable to both chambers. Real estate and financial industry organizations that have been pushing for a federal backstop to terrorism insurance since the Sept. 11 attacks hope for a law to be in place well before year’s end but not in time for the one-year anniversary of the tragic event. The 12 congresspersons and seven senators will be able to meet in September, at the earliest, when members return from the summer recess.

“The uncertainty over terrorism insurance has already had a significant impact on the commercial real estate finance industry with an estimated $3.7 billion in commercial property deals killed so far this year, and another $4.5 billion either delayed or changed,” Mortgage Bankers Association of America chairman James M. Murphy says in a statement. “With the economy in such a tenuous state, this just can’t continue. The faster Congress acts to pass legislation, the faster the real estate industry can spur the economic recovery.”

Both bills call for the government to pay 90% of terrorism-related claims beyond $10 billion but they differ with respect to the timeframe of the government’s obligation. Partisan differences of opinion on whether companies can be sued for punitive damages was a point of contention when passing the bills individually and will likely come into play during conference, as well.