Terrorism insurance bill signed into law: federal government to pay most of insurance losses from catastrophic attack.The federal government will pay most of the cost of a catastrophic terrorist attack, under a new law signed into effect last week by President Bush. Bush, who had strongly supported the Terrorism Risk Insurance Act The Terrorism Risk Insurance Act (TRIA) is a United States federal law signed into law by President George W. Bush on November 26, 2002. The Act created a federal "backstop" for insurance claims related to acts of terrorism. , said the new law would put into motion the more than $15 billion in real estate transactions held up by lack of insurance. The Coalition to Insure Against Terrorism, a wide group of representatives from real estate and other businesses, hailed the legislation saying that the lack of coverage represented a threat to the economy. "We are confident the backstop will result in the increased availability of this essential coverage," said Martin DePoy, vice president for government relations at the National Association of Real Estate Investment Trusts and a spokesperson for the group. "And we expect insurance companies will act responsibly with respect to its pricing." Insured losses from the World Trade Center attacks -- which will not be covered under the new law -- are expected to total $40 to $50 billion, more than twice the cost of any other disaster in U.S. history. Before Sept. 11, the largest loss stemming from a disaster occurred in 1992 when Hurricane Andrew This article is about the 1992 hurricane; there was also a Tropical Storm Andrew during the 1986 Atlantic hurricane season. Hurricane Andrew is the second-most-destructive hurricane in U.S. history, and the last of three Category 5 hurricanes that made U.S. caused an estimated $20 billion in losses. As a result, building owners across the country have been having difficulty obtaining terrorism insurance Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities. It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very . If it is available, owner must pay exorbitant rates for coverage. In New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , several major buildings including the Rockefeller Center Rockefeller Center, complex of buildings in central Manhattan, New York City, between 48th and 51st streets and Fifth Ave. and the Ave. of the Americas (Sixth Ave.). The project was sponsored by John D. Rockefeller, Jr. complex and the Conde Nast tower were impacted by the issue. In June, the Senate passed a terrorism insurance bill that mirrored a bill passed by the House about a year ago. Although differences existed between the two bills, House and Senate conferees were able to iron out those differences and forward the bill to the president during the lame duck An elected official, who is to be followed by another, during the period of time between the election and the date that the successor will fill the post. The term lame duck generally describes one who holds power when that power is certain to end in the near future. session of the 107th Congress. The law requires all commercial insurers of buildings to begin offering terrorism coverage immediately. Such coverage had been routinely provided until the Sept. 11 attacks caused losses of more than $40 billion and prompted the industry to withdraw coverage, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times. The bill requires the federal government to pay 90% of the cost of an attack by foreign terrorists after losses are greater than $10 billion, up to a total of $100 billion. The government will pay a smaller amount for losses less than $10 billion, according to the Times. Industry observers applauded the new law, saying that it would solve the issue of supply for terrorism insurance, but they also questioned whether it would address the issue of cost. Although insurance companies are mandated to provide coverage, the price is still likely to be high. |
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