02/26/2014 | By Ron Kuykendall
The Coalition to Insure Against Terrorism (CIAT) urged the Senate Banking, Housing and Urban Affairs Committee on Feb. 25 to extend the Terrorism Risk Insurance Act (TRIA), stressing the critical role the law plays in U.S. national and economic security.
TRIA has played a pivotal role during its 12-year history. The act provides greater stability to the economy in the face of ongoing terrorist threats and, in the event of an attack, allows the economy to recover more quickly.
TRIA was first enacted in 2002 in response to reinsurance and primary insurance companies excluding terrorism risk coverage from their policies after paying more than $30 billion in claims in the wake of 9/11. The absence of terrorism risk coverage restricted business activity and contributed to the loss of more than 30,000 U.S. jobs.
W. Edward Walter, President and CEO of Host Hotels and Resorts, Inc., who testified on behalf of CIAT, argued that TRIA plays a critical role in the American economy and must be extended. TRIA is set to expire at the end of the year.
“Without adequate terrorism insurance coverage, our economy, our jobs and our well-being become more vulnerable to terrorism,” Walter said. “Maintaining a workable federal terrorism insurance mechanism is vital for our nation’s economic security.
“In the current climate, banks and other capital providers have indicated they will not provide new financing without terrorism insurance,” said Walter. “As a result, even today, borrowers are being forced to confront the question of what options will exist after year-end, 2014. The lack of clarity around this issue will likely slow the pace of new financing, especially in the case of properties that are perceived to be at a higher risk of terrorist attacks.”
Walter added: “TRIA remains the best method to address the cost and uncertainty of terrorism – Congress should once again extend TRIA.”