Law Aids Insurance Prospects.(Terrorism Risk Insurance Act)

The Terrorism Risk Insurance Act has begun to have its intended effect, resulting in a drop in rates for terrorism coverage and broader coverage being offered by insurance policies, according to Moody's Investors Service.

In its report on the first-quarter performance of the U.S. commercial mortgage-backed securities market, Moody's says, "Rates for terrorism coverage have clearly abated from the sky-high levels of a year ago. Additionally, per occurrence language has returned vs. the more stingy aggregate limits that affected many policies immediately post- 9/11."

Also, coverage for domestic terrorism is beginning to reappear, the rating agency says, at reasonable or no additional cost.

Moreover, the market for terrorism coverage appears to be shifting away from standalone terrorism insurance policies, as evidenced by more high-profile borrowers purchasing terrorism coverage from their regular property and casualty carriers.

Even Manhattan office properties are seeing an improvement in the availability and affordability of terrorism insurance, Moody's reports.

Insurance brokers have reported terrorism ...