X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-President Bush has just enacted the Terrorism Risk Insurance Extension Act of 2005. The legislation that pushes back the expiration date of the Terrorism Risk Insurance Act of 2002 from December 31, 2005, to December 31, 2007. Bush’s signing of the extension came just days after Congress passed its compromise version of the bill, which included a series of amendments to the original legislation.

TRIA was crafted as a response to economic damage caused by the September 11 terrorist attacks; damage that occurred partially as a result of the cessation or cancellation of real estate construction and development projects due to the sudden inability for companies to acquire–or afford–terrorism coverage. In addition to adding two years to the expiration date of TRIA, the extension law contains new provisions, among them the boosting of TRIA’s activation level from $5 million to $50 million in 2006, and then to $100 million in 2007. Other stipulations include the increase in deductibles and co-payments, which will augment the insurance industry’s responsibility; the repayment of 25% of federal aid for payments in 2006 and 27.5% for 2007 payments; and the creation of the President’s Working Group on Financial Markets, which is charged with developing long-term solutions to supplant TRIA.

“Congress has agreed on legislative language that meets the critical goals set out by Treasury secretary John W. Snow when he delivered the Treasury’s TRIA report in June: a significantly reduced TRIA program, more room for private sector innovation, greater protections for the taxpayer, and recognition of the temporary nature of the program,” Treasury under secretary Randal Quarles says in a December 16 statement following Congress’s settlement on a compromise bill; the US Senate’s version was more closely aligned to the Administration’s preferences. “Many thought these goals were not achievable when this debate began, but the House and Senate worked very constructively to achieve this outcome, and we think the American taxpayer can be satisfied with the result.”

Groups, including real estate and insurance industry organizations, had been campaigning aggressively for TRIA’s extension. “Extension of the nation’s terrorism insurance program for two years is welcomed and necessary,” says Martin L. DePoy, steering committee coordinator for the Coalition to Insure Against Terrorism. “It would have been difficult, if not impossible, for policyholders to obtain affordable terror coverage in the absence of such a program. Construction and hiring would have slowed. The nation’s economic security would be in jeopardy.”

For many organizations, the next step involves more lobbying; this time around, for the development of the most desirable alternatives to TRIA. “We look forward to consulting with the President’s Working Group on Financial Markets as they study how to best ensure the long-term availability and affordability of terrorism insurance,” DePoy says. “Of particular importance to CIAT is the pressing need for coverage against nuclear, biological, chemical and radiological attacks.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Spring 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.