Survey shows support for TRIA reauthorization.
In an effort to assess the importance of TRIA, MBA surveyed its largest commercial/multifamily mortgage banking firms that were responsible for more than $115 billion in debt financing in 2003. Of those 40 firms, 29 indicated Congress should reenact the law and that a failure to do so would adversely impact the commercial/multifamily real estate market. All but one of the respondents said TRIA had made terrorism insurance more available. Responding to a question about the cost of terrorism insurance, 18 out of 23 firms said TRIA had made terrorism insurance less expensive.
Prior to passage of TRIA, the ratings agencies had downgraded billions of dollars of securities backed by commercial/multifamily real estate loans due to the lack of adequate terrorism insurance. The Treasury Department is required to submit a TRIA impact study to Congress by June 30, 2005.
Passed by Congress as a result of the Sept. 11, 2001, terrorist attacks, TRIA created a federal reinsurance program with initial loss limitations for insurers. It also put a cap on total losses to the private and public sectors at a determined amount, and included a provision for the review and evaluation of the need for reauthorization. Reflecting on the situation prior to the November 2002 passage of TRIA, 23 of the responding firms said the absence of terrorism insurance delayed or prevented some commercial real estate transactions.
"After 9/11, Congress recognized the importance of affordable and adequate terrorism insurance when it passed the terrorism Risk Insurance Act of 2002," said Gail Davis Cardwell, MBA's senior vice president, commercial/multifamily. "The survey information we gathered from our commercial/multifamily members overwhelmingly shows the importance of TRIA for day-to-day business transactions. MBA urges the Treasury Department to extend the 'make available' provisions of TRIA to ensure continued availability of terrorism insurance, and urges Congress to reauthorize TRIA as soon as possible before it expires on Dec. 31, 2005."
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|Title Annotation:||Commercial; Terrorism Risk Insurance Act|
|Date:||Apr 1, 2004|
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