WASHINGTON, DC-From real estate organizations to insurance sector representatives, nearly every industry concerned with terrorism insurance was represented at the National Press Club yesterday for the presentation of a new study on terrorism insurance by Columbia University Graduate School of Business dean R. Glenn Hubbard and Analysis Group Inc. managing principal Bruce Deal on terrorism. The study concludes that the failure to renew the Terrorism Risk Insurance Act would be economically devastating to the country in the event of a terrorist attack. The event was organized by the groups that commissioned the study–the American Insurance Association, Financial Services Roundtable, National Association of Mutual Insurance Companies, National Council on Compensation Insurance, Property Casualty Insurers Association of America, and Reinsurance Association of America.

TRIA is scheduled to expire Dec. 31, 2005. “Today’s study confirms earlier, anecdotal evidence that TRIA is a necessary stabilizing influence on the US economy and that its absence could lead to the same kinds of disruptions that arose before the law’s enactment in 2002,” says Jeffrey DeBoer, Roundtable president and CEO.

“The Mortgage Bankers Association wholeheartedly endorses the conclusions of the Effects of Federal Participation in Terrorism Risk study,” remarks Kieran Quinn, president and CEO-Column Financial, Inc. and vice chair of the MBA’s Commercial board of governors. “TRIA has been extremely effective in making terrorism insurance widely available. The TRIA extension is crucial to maintaining economic stability in the US.”

Entitled “The Economic Importance of Federal Participation in Terrorism Risk,” the report by Deal and Hubbard, who is also a former chairman of the White House Council of Economic Advisers, is a result of the culling of information from industry publications and academic research, as well as from interviews with such respondents as policyholder representatives, lenders, insurers, reinsurers and trade associations. In conclusion, the study finds that without TRIA, the consequent exorbitant costs or unavailability of insurance will negatively impact insurers and policyholders and “will result in lower economic performance and greater disruption to the US economy in the event of a terrorist attack.”

Deal and Hubbard bring the report to an end with their contention that, “renewal of TRIA for the near term will strengthen US economic performance,” and that “extending TRIA for two more years will allow time to evaluate possible alternative approaches to TRIA.”

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