WASHINGTON, Feb. 6, 2013 /PRNewswire-USNewswire/ -- The Real Estate Roundtable today commended Rep. Michael Grimm (R-NY) and other representatives for introducing bipartisan legislation to extend the nation's terrorism risk insurance program until year-end 2019 – a first step toward ensuring continued access to credit for commercial property owners and ensuring that the U.S. economy will continue to function in the wake of a major terrorist attack.
"Terrorism continues to pose a threat to our nation, to American businesses and to real estate, which houses America's economy," said Roundtable President and CEO Jeffrey D. DeBoer. "Without adequate terrorism insurance coverage, our economy, jobs, and well-being become more vulnerable to the designs of terrorists who hope to destroy our economic strength."Rep. Grimm's bill, the "Terrorism Risk Insurance Act of 2002 Reauthorization Act of 2013," is co-sponsored by Reps. Carolyn Maloney (D-NY), Pete Sessions (R-TX), Andre Carson (D-IN), Peter King (R-NY), Gregory Meeks (D-NY), Dennis Ross (R-FL), Timothy Bishop (D-NY) and Carolyn McCarthy (D-NY). The TRIA reauthorization bill is necessary to address the scheduled expiration of the current terrorism insurance backstop at year-end 2014. Unless there is an active reinsurance marketplace, direct property insurance carriers will not provide terrorism coverage to businesses – as was the case immediately following the 9/11 attacks. Since a viable private sector marketplace for this coverage does not yet fully exist, TRIA's expiration would leave policyholders and taxpayers exposed and unprotected – just as they were after 9/11. Given the continuing difficulty of modeling terrorism risk and accurately predicting potential strikes, reinsurers remain unwilling to provide such reinsurance, and therefore the private marketplace for terrorism insurance remains broken. The Government Accountability Office (GAO), President's Working Group on Financial Markets and other terrorism risk observers have consistently concluded that "acts of terrorism" are uninsurable risks. (See references below.)