Daily Real Estate News  |  August 2, 2007  |   Progress for NAR-Backed Terrorism Insurance Bill
Reauthorization of the federal government’s terrorism risk insurance program will help maintain a strong commercial real estate market and the health of the nation’s economy, says the NATIONAL ASSOCIATION OF REALTORS®.

The present terrorism insurance is set to expire at the end of this year. NAR, which has long supported the Terrorism Risk Insurance Revision Extension Act, commended the passage of H.R. 2761 by the House Financial Services Committee on Wednesday.

“If the legislation is not implemented quickly, the potential unavailability of terrorism risk insurance would have a great impact on many commercial financing agreements and would negatively impact the commercial real estate market,” says NAR President Pat V. Combs.

If approved by the Senate after its summer recess, the bill would extend for 15 years the terrorism insurance program that was initiated after the September 11, 2001, terrorist attacks. The program makes coverage available for nuclear, biological, chemical or radiological attacks; requires the Treasury Department to report on the terrorism insurance market every two years, including an analysis of terrorism insurance pricing impacts on commercial real estate; and establishes a blue ribbon commission tasked with recommending a long-term private market solution.

“Today’s vote recognizes that since Congress enacted the Terrorism Risk Insurance Act in 2002, the essential facts have not changed,” Combs says. “Terrorism continues to be an unpredictable threat. The reauthorization of TRIA will strengthen the economic security of the commercial real estate market by reducing the uncertainty of terrorism coverage availability, and by covering most conceivable forms of terrorist activity.”

Earlier in the year, NAR testified that the “proper” long-term solution should focus on what private markets have been unwilling or unable to do.

“The ideal solution must enable businesses to purchase insurance for the most catastrophic conventional terrorism risks; provide adequate insurance capacity in all major commercial real estate markets, particularly in high-risk, urban areas; and provide meaningful insurance against the so-called NBCR risks,” Combs says. “We believe this bill does that.”

— REALTOR Magazine Online