Senate Hearing on TRIA Reauthorization
On Feb. 25, the Senate Banking Committee held Part II in a series of hearings to examine the Terrorism Risk Insurance Act (TRIA) of 2002, which sunsets on December 31, 2014. TRIA was passed in the aftermath of the September 11, 2001 terrorist attacks, when insurers backed out of the terrorism insurance market, causing losses to construction and real estate. It created a federal reinsurance risk-sharing program, which requires that insurers make terrorism coverage available along with their property and casualty lines. It has been extended twice, once in 2005 for an additional two years, and again in 2007 for seven more years.
Among the witnesses there was Mr. W. Edward Walter of Host Hotels and Resorts, testifying on behalf of the Coalition to Insure Against Terrorism (CIAT), which NAR is a member of. During the hearing, strong support was expressed for the TRIA program from both Democrat and Republican Senators and the witnesses. The statements and questions focused on TRIA's successes in helping the insurance market provide terrorism coverage, how making changes to the program - such as raising the "trigger" amount for the federal backstop - could affect the market for terrorism insurance, the cost of the program to taxpayers, and whether the private insurance market has developed enough that the federal backstop provided by TRIA is no longer necessary.
NAR sent a letter to the Senate Banking Committee ahead of its first hearing on TRIA in September 2013, expressing strong support for the program and urging support for its reauthorization.