Group fights to retain terror insurance rights.

A coalition is lobbying the government to prevent insurance companies from denying their clients terrorism coverage.

The group wants to extend a provision of the Terrorism Risk Insurance Act (TRIA) of 2002, under which the government shares in 90 percent of the costs of a company's insured losses--up to $100 billion--in the event of a terrorist strike.

The act was inspired by the terrorist attacks of Sept. 11, 2001, and the dragged-out court battle between World Trade Center leaseholder Larry Silverstein and his insurers.

Although the act is valid until the end of 2005, the "make available" provision that states insurance companies must make terrorism coverage available to all their policyholders and must offer terrorism insurance to all its new clients, will expire at the end of the year.

Jay Hyde, vice president of communications for the National Association of Real Estate Investment Trusts (NAREIT), said the act was enacted to prevent insurance companies from using up their reserve funds, in the event of a terrorist attack.

"Prior to 9/11, this coverage was wrapped into property and casualty coverage," Hyde said. After the attacks, he added, "they separated the coverage and said, 'We can't write that coverage; it could deplete our reserve.'"

"The program would still be in effect next year, but unless the provision is extended there would be no mandate requiring these companies to offer this kind of coverage," Hyde said. "It calls it into question."

Anne Womack, director of public affairs, said that the Treasury Department has issued a request for comment seeking feedback on extending the provision. Treasury Secretary John Snow has until Sept. 1 to extend the provision. "We published in the Federal Register a request for comment from interested individuals and organizations, whether they believe the make available provision should be extended. And if so, why or why not?"

The Consumer Federation of America opposes extending the act. In a report issued earlier this month, CFA claimed they found insurance experts have set terrorism insurance rates quite low in most of the country and that, according to insurance risk models, private insurers will be completely responsible for all terrorism insurance losses in all but nine large cities by 2005.

"The insurance industry got a helping hand in the wake of 9-11 when Congress and the president agreed to offer free terrorism reinsurance backed by taxpayer dollars," said J. Robert Hunter, CFA's director of insurance earlier this month.

"Our study clearly documents that the insurance industry is more than ready to stand on its own two feet and that taxpayer backup should end. The ability of the industry to insure against terrorism is enormous and growing, profits are quite substantial and the financial condition of insurers overall is rock solid."

Individuals or corporations who wish to send their comments to the Treasury Department can send e-mail to [e-mail].