Coalition to Insure Against Terrorism Asks President to Recommend Extension of 'Make Available' Provision.

Business Editors

WASHINGTON--(BUSINESS WIRE)--April 21, 2004

The following letter from the 66-member Coalition to Insure Against Terrorism (CIAT) to President George W. Bush urges the President to recommend that the Secretary of Treasury extend the vital "make available" provision of the Terrorism Risk Insurance Act this year.

April 21, 2004

The Honorable George W. Bush
President of the United States
The White House
Washington, DC 20500

Dear Mr. President:

The Coalition to Insure Against Terrorism (CIAT), a broad-based
alliance of insurance policyholders, was formed after 9/11 to support
your efforts to enact the Terrorism Risk Insurance Act (TRIA). Thanks
to your indispensable leadership in securing passage of this
legislation, TRIA has been a success in its limited life to date. It
has stabilized the terrorism insurance marketplace and restored
capacity that previously was unavailable to an enormous portion of the
U.S. economy, thereby ensuring business continuity that is critical to
the nation's overall economic and employment security.

Notwithstanding the encouraging signs that TRIA is working for now as
intended, the members of CIAT are increasingly anxious about the
looming prospect that our ability to obtain comprehensive and
cost-effective terrorism coverage will be diminished substantially in
2005 unless the Secretary of the Treasury moves affirmatively, by
September 1, 2004, to extend the so-called "make available" provision
of TRIA. If this provision is allowed to expire this year, American
businesses face the alarming prospect that terrorism insurance
policies again will become scarce, if not unavailable altogether, a
full year earlier than the statute's termination date at the end of
2005. Further, it is likely that the financial markets will react
negatively in the final quarter of 2004 to the prospect that insurance
may not be available.

This is because, absent such an extension, primary insurers would no
longer be mandated to make terrorism insurance available on the same
terms and conditions as other insurance, and because the private
market for terrorism reinsurance below the federal trigger has failed
to develop in a sufficient manner.

Although we had hoped initially, like all who were involved in the
passage of TRIA, that a significant private market for terrorism
reinsurance would emerge in a post-9/11 TRIA environment, this does
not appear to have happened. Consequently, we are seriously concerned
that with the absence of a "mandate" in 2005 under TRIA and with a
paucity of private market reinsurance available, primary insurers will
not offer, or "make available," significant, comprehensive terrorism
insurance for the 2005 marketplace. This is especially troubling since
the current marketplace is already handicapped by the unavailability
of insurance against biological, chemical, radiological and nuclear
events - even though TRIA backstops such events - and the very limited
availability of insurance against terrorism not covered by TRIA
(so-called "domestic" events).

Given your strong and unflagging support for TRIA in the wake of 9/11,
we are confident that you share our view that recent developments
throughout the world only underscore the importance of TRIA today and
the economic imperative of affordable and available insurance against
terrorism tomorrow.

Accordingly, we respectfully urge you to recommend to the Secretary of
Treasury that he extend the vital "make available" provision of TRIA
this year. This will ensure that the insurance industry will be
prepared in 2005 to provide American business with one of the critical
tools necessary to help protect the American economy and American jobs
from the ugly and harmful specter of terrorism.

Respectfully yours,

THE COALITION TO INSURE AGAINST TERRORISM

cc: The Honorable John W. Snow