Schumer Announces Bipartisan Legislation to Re-Authorize, Extend Terrorism Risk Insurance Program
By Long Island News & PRs Published: February 26 2014
Terrorism Risk Insurance is Critical Tool in Spurring Lower Manhattan Redevelopment and Economic Growth in High-Risk Areas.
Washington, DC - February 25, 2014 - U.S. Senator Charles E. Schumer today announced, during a Senate hearing, that he will work with a bipartisan group of Senators to introduce legislation that will re-authorize and extend the Terrorism Risk Insurance Act (TRIA) program, which is set to expire at the end of 2014. Created in 2002, the TRIA program is a critical priority for post-9/11 New York. The program provides a federal backstop for insurance coverage against losses from terrorist attacks. This insurance is crucial to spurring new development and protecting existing real estate in high-risk urban areas like lower Manhattan. TRIA has been reauthorized in 2005 and in 2007.
“The TRIA program is one of the best, if not the best, post-9/11 examples of government partnering with the private sector to solve problems that neither can solve on their own,” said Schumer. “There was so much uncertainty following that terrible day – particularly around whether we would ever rebuild – and the TRIA program has helped spur redevelopment by providing the certainty we need in the face of unfathomable events. The ongoing redevelopment of downtown Manhattan is a great reminder of the program’s success and clearly demonstrates why we must re-authorize and extend this program as soon as possible.”
After 9/11, it quickly became clear that private insurance companies would not provide coverage for losses related to terrorist attacks because attacks were deemed too unpredictable, and the potential losses too large. The TRIA program, however, has enabled private insurance companies to provide policies in high-risk areas and to high-risk developments such as stadiums, malls, ports and airports.
Even though the program does not expire until the end of 2014, Schumer urged his colleagues to work with him to quickly pass a bill since policies are starting to be written that extend into 2015. Without certainty about the availability of the TRIA program moving forward, it is unclear whether policies will maintain the same protections as they have had in the past against losses sustained as the result of a terrorist attack.
The program was made necessary after the September 11th attacks when private insurers became reluctant to insure real estate owners for fear of massive losses from terrorist attacks. TRIA has reversed that negative trend by making the federal government the insurer of last resort for catastrophic losses. Schumer was one of the original authors of the TRIA legislation in 2002.