Last week, a diverse group of insurance experts, policyholders and industry professionals joined with Members of Congress to discuss the importance of the Terrorism Risk Insurance Act (TRIA), an important federal program which, for more than a decade, has created jobs and ensured our largest venues, businesses and employers have affordable access to terrorism insurance coverage.
Enacted in 2002, the TRIA program was a response to the terrorist attacks of September 2001, when many insurers and reinsurers began to exclude terrorism coverage from commercial insurance policies. If coverage was offered at all, it was at a cost that was prohibitively high.
TRIA made terrorism insurance both available and affordable, spurring job creation and economic development following one of the most severe periods of uncertainty in our nation’s history. The program is currently slated to expire at the end of 2014.
As part of a panel discussion attended by numerous members of Congress, experts underscored the need for a quick, clean reauthorization of the program to ensure our continued economic recovery. The panel was organized by Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee.
“As TRIA’s expiration draws closer, and insurance contracts are coming up for renewal, Congress must provide these industries the certainty they need to continue to foster American economic development,” said Waters. “Americans should rest assured that should a terrorist attack occur, their federal government will not leave them out in the cold.”
The lively discussion illustrated the TRIA program’s broad base of support. Panelists included Jeff DeBoer, President and CEO of the Real Estate Roundtable; Ed Walter, President and CEO of Host Hotels & Resorts, Inc., Molly Campbell, Deputy Executive Director of Finance and Administration at the Port of Los Angeles; and Ethan Sonnichsen, Government Relations, at the National Association of Insurance Commissioners (NAIC).
Real Estate Roundtable President Jeff DeBoer pointed out that an early reauthorization of TRIA is “a top priority for American business” and that a divisive fight over TRIA’s renewal could halt our economic recovery. “Just as our economy appears to be going in the right direction, a protracted debate and delay on dealing with extending TRIA could jeopardize it all,” he said.
TRIA has been a remarkable success story, by fostering continued economic and commercial real estate development across the U.S. It makes terrorism insurance both available and affordable by requiring insurance companies to offer coverage to commercial entities in exchange for a federal backstop that is used to protect against only those terrorism-related losses that exceed $100 million dollars.
Democrats, Republicans and a wide array of businesses and industries support TRIA. The program has been reauthorized twice by Congress with overwhelming bipartisan support. And the construction, manufacturing, retail, transportation, real estate, sporting and entertainment industries have all expressed support for TRIA’s renewal.
“The continued and uninterrupted existence of TRIA is the catalyst that brings in the private market to provide meaningful capacity for affordable commercial terrorism coverage,” said Ethan Sonnichsen of NAIC, highlighting the mutually beneficial relationship that TRIA creates between private market and government.
Host Hotels President Ed Walter spoke from his company’s experience losing a property – and the lives of two – during the World Trade Center attack. Further, he expressed his belief that the strongest argument for TRIA is that “it’s working and at virtually no cost to the taxpayer.” He continued, “TRIA remains the best method to address the economic cost and uncertainty of terrorism – Congress should once again extend TRIA.”
Walter spoke on behalf of the Coalition to Insure Against Terrorism (CIAT), which represents a wide array of businesses and organizations throughout the transportation, real estate, manufacturing, construction, entertainment and retail sectors.
Attending the discussion were Representatives Carolyn Maloney (NY), Michael E. Capuano (MA), Al Green (TX), Bill Foster (IL), Stephen Lynch (MA), Denny Heck (WA), Joseph Crowley (NJ), Jim Moran (VA), and Steven Horsford (NV).
Molly Campbell of the Port of Los Angeles expressed concern that without TRIA, the cost of private insurance would be unaffordable. “Because of the difficulty in determining the frequency, severity, and loss potential associated with an act of terrorism, we're concerned that insurance may not offer coverage that is effective or affordable,” Campbell said. “This was the case immediately post-9/11 and prior to the passage of TRIA.”
Waters added “Now is not the time to debate changes to a program that we know works. Now is the time for the quick, clean, and long-term reauthorization of TRIA.”
A complete video of the panel discussion can be viewed below.