Urban Area Lawmakers Push for TRIA Extension

Lawmakers in California and New York are drawing attention to the Terrorism Risk Insurance Act (TRIA), which was enacted in 2002 because the private insurance marketplace was failing to provide adequate terrorism insurance coverage following the events of 9/11.

Passage of TRIA stabilized the insurance market, helping improve the construction, real estate, and finance segments of the economy. Real estate experts say that without the government reinsurance provided under TRIA, terrorism coverage is either impossible to obtain for some owners or prohibitively expensive.

TRIA was extended in 2005 for two years, and then in 2007 for a seven-year period. It expires at the end of 2014, which has lawmakers and other supporters of TRIA taking action.

Both California and New York are home to skyscrapers, airports, tourist attractions, sporting venues, universities, bridges, military bases, and other major potential terrorism targets. California is also the nation’s largest agricultural supplier. The extension of TRIA is being touted as protection for high-value commercial properties and the citizens who frequent them.

A California coalition of tourism entities, commercial property owners, and insurers are calling on state legislators to support a resolution urging Congress to extend TRIA. AJR 34 was authored by Assemblyman Ken Cooley, D-Rancho Cordova. The resolution calls for reauthorization of TRIA, requiring insurers to offer coverage for terrorism to policyholders in certain commercial insurance lines.

Meanwhile, in New York, Reps. Michael Grimm, R-N.Y., and Carolyn Maloney, D-N.Y., have introduced HR 508, the “Terrorism Risk Insurance Extension Act”—a bill that extends TRIA through 2019.

Insurance Companies, the Building Owners and Managers Association of California, California Business Properties Association, California Financial Services Association, the California Hotel & Lodging Association, Commercial Real Estate Development Association, International Council of Shopping Centers, National Association of Mutual Insurance Companies, Pacific Association of Domestic Insurance Companies, and the Personal Insurance Federation of California.

For its part, the Institute of Real Estate Management has reminded its members to ask their U.S. representatives to co-sponsor HR 508, and also urge their U.S. senators to support the extension of TRIA legislation.