A Call For Terrorism Risk Insurance
June 17, 2002
Bankers, Builders Group Rally Support For Reinsurance Backstop
Inman News Features
The Mortgage Bankers Association of America and BOMA International are among some of the organizations who have called upon the Senate to pass the Terrorism Risk Insurance Act of 2002, S. 2600.
"The Senate now has the opportunity to make one thing certain in this time of uncertainty -- the assurance that a federal reinsurance backstop will be in place to help sustain economic growth and help protect the economy in the event of another terrorist attack," said James M. Murphy, MBA chairman. "We strongly urge the Senate to immediately pass the Terrorism Risk Insurance bill."
The risks associated with the inability to obtain adequate and affordable property and casualty insurance has threatened to undermine the well being of the country?s economy, according to the MBA.
Examples of how the real estate finance industry has been impacted by this lack of insurance include the delay, canceling or restructuring of "many" commercial transactions; issuance of new commercial mortgage-backed securities has been curtailed; property owners have witnessed cost increases upward of 300 percent in terrorism insurance coverage; Moody?s Investors Service and Fitch Ratings have issued a downgrade watch for a number of properties; and construction jobs to refurbish or build new properties have fallen, according to the MBA.
MBA supports a terrorism insurance bill that will establish a federal government reinsurance backstop; place a cap on total losses to the private and public sectors at a negotiated amount with amounts in excess of the cap to be approved by Congress in an effort to protect unlimited liability of taxpayers; and include a provision for the review and evaluation of the need for future government intervention.
BOMA International also has recently issued statements in support of the terrorist insurance act calling on its members to urge their representatives to pass the legislation.
Copyright: Inman News Service