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WASHINGTON, DC-Faced with a December 31, 2005 expiration of the Terrorism Risk Insurance Act of 2002–which allows for a federal backstop measure in which the government would cover payouts exceeding $100 billion of insurers’ liability in the event of another terrorist attack–the Coalition to Insure Against Terrorism has taken its efforts to secure an extension of the act to President Bush. CIAT sent a letter to Bush commending him on his support of TRIA in the past, and requesting that he lean on Congress to pass legislation that would extend the act.

“With TRIA set to expire at year-end, there is no evidence to suggest that insurance markets will be able to provide adequate insurance against catastrophic acts of terrorism without a federal reinsurance backstop,” CIAT wrote. “In fact, two recent studies, by Moody’s and by Marsh Inc., have both concluded that if TRIA is not extended the insurance market is unlikely to have the necessary capacity to sustain the current price or availability of terrorism insurance.”

TRIA extension supporters, who range from real estate industry heads to political leaders, have been pushing for a two-year extension of the act in order to have more time to bolster the commercial real estate market, stabilize the terrorism insurance and reinsurance industry, and establish a long-term alternative to TRIA. A bevy of congressional members have expressed support for a temporary continuation of TRIA, sponsoring legislation that would extend the expiration to December 31, 2007. The House and the Senate must craft a single package in committee.

“Recent developments throughout the world only underscore the importance of TRIA today and the economic imperative of affordable and available insurance against terrorism tomorrow,” the letter continues. “To this end, we respectfully urge you to once again exert your leadership in securing our nation’s economy from terrorist threats by calling upon Congress to quickly pass legislation that improves and extends TRIA.”

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