Congress Passes Terrorism Insurance Act Extension

01/04/2006 |

Signed into law just 9 days before its expiration, individuals breathe a sigh of relief

 

"Not a moment too soon" is the sentiment of many as they celebrate the recent passage by Congress of the Terrorism Risk Insurance Extension Act (TRIEA). The new legislation (S. 467) renews the program for 2 years and was signed by President Bush on Dec. 22, 2005. Industry associations such as the National Association of Industrial and Office Properties (NAIOP), the Building Owners and Managers Association (BOMA) Intl., and the National Multi Housing Council have been in support of the bill and feared that without an extension terrorism insurance would only be secured with great difficulty and significant expense.

The bill is a revision of the 2002 Terrorism Risk Insurance Act. In information released by the National Multi Housing Council, the organization explains: “The final bill responds to White House demands that the program be scaled back to reduce taxpayers’ potential liability and encourage private market development of such products. It increases the portion of losses insurers would have to pay and raises the amount of overall loss that triggers the federal payment from $5 million to $50 million in 2006 and then to $100 million in 2007.” To review the differences between TRIA and the Terrorism Risk Insurance Extension Act (TRIEA) of 2005 (S. 467), visit the National Multi Housing Council website (www.nmhc.org/content/ServeFile.cfm?FileID=5127). The organization is providing a side-by-side comparison online.

The new TRIEA calls for the President’s Working Group on Financial Markets to study the long-term availability and affordability of terrorism risk insurance. This includes coverage for nuclear, biological, chemical, and radiological attacks.


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