FAA Joins Successful Push to Save Terrorism Risk Insurance Program

With the opening of the 114th Congress came much welcome relief to apartment owners and managers who rely on terrorism insurance coverage for their properties. The Senate and House overwhelmingly approved the Terrorism Risk Insurance Program Reauthorization Act of 2015 (H.R. 26), which extends the program for six years.

FAA partnered with NAA and the National Multifamily Housing Council to advocate for reauthorizing the Terrorism Risk Insurance Act (TRIA), which expired at the end of 2014 after Congress failed to pass legislation to keep the act in effect.

Courtney Barnard, FAA government affairs director, and Greg Brown, NAA vice president of government affairs, traveled to Washington, D.C., in November to urge members of Congress to support the reauthorization. They met with U.S. Rep. Patrick McHenry (R-N.C.), deputy house whip, as well as with U.S. representatives John Mica (R), Patrick Murphy (D), and Dennis Ross (R).

The act provides apartment owners with subsidized property insurance for protection against terrorist acts. Many mortgages require the owner to carry this insurance.   

The NAA and NMHC report that the reauthorization did not simply extend the program, it also made some modest changes aimed at increasing taxpayer protections and private market participation. Specifically, it incrementally raises the program trigger to $200 million from $100 million and reduces the federal loss share from 85 percent to 80 percent. It also increases the level of federal recoupment by $10 billion.

In addition, studies to assess future private market capacity and various program funding options are to be presented to Congress. The compromise package overall represents a win for the policyholder community and ensures continued stability in the real estate market.