January 9, 2015
Terrorism Risk Insurance Act Extended for Six Years(WASHINGTON, D.C. – January 9, 2015) The Building Owners and Managers Association (BOMA) International applauds Congress for its passage of the Terrorism Risk Insurance Program Reauthorization Act of 2015, which will allow the U.S. federal government to provide an insurance backstop for claims related to terrorism for an additional six years. The long-term extension of the Terrorism Risk Insurance Act (TRIA) provides certainty to the real estate industry and its transactions nationwide, as terrorism continues to be a serious threat and its actuarial risk cannot be calculated.“The extension of TRIA was a priority issue for BOMA International and the commercial real estate industry, and we are pleased that Congress took quick action to pass this critical legislation to help insure our nation’s buildings against terrorism,” said BOMA International Chair John G. Oliver, BOMA Fellow, managing principal for Oliver & Company. “Mitigating financial risk is an essential step in maintaining the economic momentum of the commercial real estate industry as it continues to recover.”TRIA was first put into place during the immediate aftermath of 9/11, when many building owners were advised that their policies would not be renewed or that their new policies would exclude terror or war risks. Thirteen years into the government program, it still appears that the insurance and reinsurance industry cannot accurately underwrite and assume the risk. The renewal of TRIA is a huge victory for BOMA International and its partners in the Coalition to Insure Against Terrorism who have diligently worked to ensure the continuation of this essential program.The program has been extended and revised twice before (in 2005 and 2007) since its initial passage in 2002. In 2013, Congress began reexamining the issue, and Sen. Charles Schumer (D-N.Y.) introduced the new renewal legislation in July of 2014. After failing to pass in the Senate during the most recent lame-duck session due to objections to added riders, TRIA expired on December 31, 2014. However, as soon as the 114th Congress convened this week, both chambers made it a priority to quickly put up for vote H.R. 26, the Terrorism Risk Insurance Program Reauthorization Act of 2015. Yesterday afternoon, the Senate passed H.R. 26 by a vote of 93-4, following the House’s passage of the same legislation earlier this week by an equally overwhelming majority of 416-5.The new legislation will gradually increase the loss threshold that triggers federal assistance under the program from $100 million to $200 million, which will further protect taxpayers from any financial burden—though no federal funds provided by the backstop have ever been used. As neither insurance providers nor policyholders can possess conclusive information on possible terrorist threats in order to calculate or mitigate risk, the federal government’s role is critical in guarding against unexpected losses.TRIA not only protects businesses and construction projects that create thousands of jobs, but it is essential to the economic security of the country overall, as the financial implications from inadequately insured businesses would only add to the devastation of a terrorist attack. To ensure business continuity, protect taxpayers and policyholders and provide a mechanism for the orderly payout of claims in the event of a terrorist attack, it was important for the terrorism risk insurance program to be renewed.
About BOMA InternationalThe Building Owners and Managers Association (BOMA) International is a federation of 91 BOMA U.S. associations and 17 international affiliates. Founded in 1907, BOMA represents the owners and managers of all commercial property types including 10.4 billion square feet of U.S. office space that supports 1.8 million jobs and contributes $227.6 billion to the U.S. GDP. Its mission is to advance a vibrant commercial real estate industry through advocacy, influence and knowledge. Learn more at www.boma.org.
Manager of Communications & Marketing