By Bill Parry
U.S. Rep. Carolyn Maloney (D-Astoria) called on Congress to extend the Terrorism Risk Insurance Act at Ground Zero Saturday.
With time running out on the legislative calender, she said quick action is needed to prevent the program’s expiration, which Maloney called vital to New York’s economy.
“After 9/11 you couldn’t get insurance for a hot dog stand, development stalled and New York was slow to rebuild, then Congress passed the Terrorism Risk Insurance Act,” Maloney said. “Now the program is set to expire, but the threat of another attack is still there and New York’s stadiums, theaters and iconic buildings will lose their insurance, making our city even more vulnerable. The program doesn’t cost taxpayers a dime, but congressional gridlock combined with opposition from hard-line Republicans puts the program and our economy at great danger.”
Meanwhile, U.S. Rep. Peter King (R-Massapequa Park) is leading a revolt inside the Republican camp, according to the New York Times. King claims to have the backing of 25 to 30 Republicans from metropolitan areas, unhappy with the effort to pare federal terrorism insurance.
Maloney, the lead Democratic sponsor of a bill to renew the program, objects to a provision of a bill passed by House Republicans on the Financial Services Committee, which would reduce federal support for areas vulnerable to attack by increasing the TRIA “trigger,” or the point at which the government would step in to help, by 500 percent.
This would make terrorism insurance less available to businesses, because it would force small- and medium-size insurers out of the market entirely.
That legislation is likely to receive a vote on the House floor in the next two weeks. The U.S. Senate is expected to take action on a stronger TRIA reauthorization in the coming weeks as well.
Warren Heck, chairman and CEO of Greater New York Mutual Insurance Co., said, “I am deeply concerned with a number of extreme changes in the TRIA House bill, particularly the increase in the trigger from $100 million to $500 million, that I believe will have a devastating impact on the U.S. business community and economy.”
The concern was shared by Steven Spinola, president of the Real Estate Board of New York.
“The extension of TRIA is critical to ensuring jobs and revenue that are generated by building iconic landmarks in New York and across the nation can continue to operate and grow. New York City is a symbol of freedom across our country and the world and therefore remains a target.”
A study by the Rand Corp. found that eliminating TRIA would cost taxpayers as much as $7 billion in the event of an attack. The greater federal spending would result from the need for greater federal disaster assistance due to an increase in uninsured losses.
After the 9/11 terrorist attacks, many insurance companies excluded terrorism events from their insurance policies. As a result, Congress passed TRIA as a three-year temporary program in 2002, which created a federal backstop to protect against terrorism-related losses.
The program has been extended twice and Maloney is calling for a third extension, this one for five years.
Reach reporter Bill Parry by e-mail at bparry@cnglocal.com or by phone at 718-260-4538.
