TRIA ALERT: Your Help Needed to Break House Impasse

Despite a Dec. 31 expiration date for the renewal of the Terrorism Risk Insurance Act (TRIA), the US House of Representatives remains at an impasse on how to proceed forward on renewing the Act. Though the New York delegation has always favored the Act, as it provides for government support to lessen the burden on the private sector's payments for this catastrophic insurance coverage, there are varying opinions and conflict on details within the legislation, including the amount of money the federal government will contribute. Republican representatives favor a higher dollar limit, or backstop, of $500 million to be reached before the government steps in to help, as opposed to the original $100 million. Democrats are advocating staying at the current backstop of $100 million.

According to a variety of sources, Republicans want to move the law toward a regular insurance market where risk is assumed by private insurers, rather than the government. Democrats feel the higher cap ($500 million) will force out smaller, regional insurance companies and raise rates. There may also be skepticism about how a classical market will work in light of the vastly unpredictable nature of terrorism and its potentially cataclysmic results.

The bill that came out of the House committee was voted upon straight partisan lines, and according to Representative Peter King (R) from Long Island, it cannot pass as written. King opposes the bill, as do most of the New York-area delegation, who would prefer to extend the bill as is, or perhaps with minor revisions. However, two other bills are on the table--including one sponsored by Reps. Michael Grimm-R and Carolyn Maloney-D--and most of the 22-member New York City delegation has signed on to one or the other.In a strong bi-partisan showing, the Senate passed a 7-year extension of TRIA in July by a vote of 93-4.

So the time has come for compromise and working through details together. We're urging you to write your representative and this link from BOMA International's Legislative Action Center. This link will help you with sample language you may need in your letter. Please take this step--failure to renew will greatly affect the bottom line of our industry.

TRIA was first enacted following 9/11 and has been instrumental in ensuring that terrorism insurance coverage is available at reasonable rates and terms.

BOMA/NY
http://www.bomany.org/