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Lenders Lobby for Renewal of Terror Insurance Availability Clause.
The approaching end-of-year deadline for the expiration of the "make-available" provision of the Terrorism Risk Insurance Act has pushed the commercial real estate financing industry to take proactive action. This provision requires insurers to provide terrorism insurance coverage on commercial property along with regular "all risk" coverage, rather than provide terrorism insurance coverage on a "standalone" basis as they were doing in the aftermath of the terrorist attacks of 9/11.
At that time, insurers had taken the position that they did not have sufficient information to model for the risks of terrorist attacks and price the insurance accordingly. This stance on the part of insurers caused the price of terrorism insurance to go up as market forces came into play. Once TRIA was enacted, an equilibrium of a sort emerged and terrorism insurance was said to be more widely available at more reasonable prices. The provision is set to expire this year unless it is extended through 2005 by the Treasury secretary. TRIA itself is set to expire next year unless further extended by Congress.
The Mortgage Bankers Association has assumed a front-end role in asking for the provision to be extended and has conducted a study to get information about the effectiveness of TRIA. The findings are to be presented to the Treasury Department. The MBA survey was done on a base of $656 billion of commercial/multifamily mortgage debt outstanding, of which 83.5% had terrorism insurance in place. The average loan size for the 122,811 loans in the study is $5.3 million. The MBA survey covered servicers representing one-third of the $2 trillion commercial/multifamily servicing market.
According to the survey, commercial servicers expect that only 20% of their portfolios, representing $132 billion in loans, overall will have terrorism risk insurance in place by next spring if the "make-available" provision of the TRIA is not extended. The mortgage bankers' trade association said ...
- Terrorism Insurance - Congress Must Extend the Federal Terrorism Risk Insurance...
- Press release article from: PR Newswire July 23, 2004 700+ words
...industries and entities relying on TRIA. TRIA was enacted with bipartisan support...an uninsurable risk. The terrorism insurance market dried up. Many types of...economic victims of terrorism. TRIA has stabilized the commercial...
- Realty Industry Asks for Expansion of Terrorism Insurance Law: TRIA has been...
- Magazine article from: National Mortgage News Thangavelu, Poonkulali March 12, 2007 700+ words
...backstop provided by TRIA has also helped. If...that absent a backstop terrorism insurance may become unavailable...not if. Calling the TRIA program an "unqualified...He concluded that TRIA is "not about protecting...available and affordable terrorism insurance will not only ...
- TRIA extension measure attracts support from insurance...
- Magazine article from: Business Insurance Hofmann, Mark A. July 5, 2004 700+ words
...industry groups is calling the Terrorism Insurance Backstop Extension Act a "positive...Risk Insurance Act this year. TRIA, which would provide a federal...Texas, last week introduced the Terrorism Insurance Backstop Extension Act-H...
- TRIA extension bill good, can get better.(laws of terrorism insurance)(Brief...
- Magazine article from: Business Insurance June 25, 2007 700+ words
...months before the existing federal terrorism insurance backstop is set to expire. As we...bring long-term certainty to the terrorism insurance marketplace by extending the federal...concerns receive a fair hearing because terrorism insurance is not a partisan issue-it's...
- Extension of TRIA only a short-term fix.(Congress approval for terrorism...
- Magazine article from: Business Insurance December 26, 2005 700+ words
...scaled-back version of the federal terrorism insurance backstop through the end of 2007...that returns some certainty to the terrorism insurance market comes as good news. But...problems associated with providing terrorism insurance by itself made the House bill the...
- Cutting back TRIA would be foolhardy.(terrorism insurance coverage)(Brief...
- Magazine article from: Business Insurance May 18, 2009 700+ words
...ALMOST ANY reasonable measure, the federal government's terrorism insurance backstop program has been a success. The program restored...as destructive as one detonated by a foreign one. The terrorism insurance backstop has proved its worth. There's no appetite...
- Support for revamped TRIA growing.(Terrorism Risk Insurance Act )
- Magazine article from: Mortgage Banking September 1, 2005 700+ words
...policyholders. TRIA allows commercial...borrowers to obtain terrorism insurance coverage at a...while satisfying terrorism insurance requirements of...commercial servicers. TRIA is set to expire...expiration of TRIA will only exacerbate the lack of terrorism ...
- Treasury releases TRIA report.(Commercial)(Terrorism Risk Insurance Act)
- Magazine article from: Mortgage Banking August 1, 2005 700+ words
...of 2002 (TRIA) has achieved...stabilizing the terrorism insurance market following...satisfying the terrorism insurance requirements...servicers. TRIA is set to...removal of the TRIA subsidy is...to be less terrorism insurance written by...