On Monday, various industry groups, including RIMS, provided comments to the New York City Council Committee on State and Federal Legislation. The hearing was held to discuss proposed NYC Council resolution 1806-2013 which calls on the federal government to enact a long-term extension of the Terrorism Risk Insurance Act (TRIA).
Congresswoman Carolyn Maloney (D-NY) kicked off the hearing by strongly expressing her continued support for the program. Rep. Maloney is a co-sponsor of legislation that would extend the TRIA program for an additional five years beyond December 31, 2014. She urged councilmembers to take an active role in reaching out to other local governments throughout the country to build support for an extension. Rep. Maloney made it clear that TRIA is not a program for New York City but rather a program that provides stability to the entire nation’s economy.
Rep. Maloney was followed by a panel consisting of the Alliance for Downtown New York, the Real Estate Board of NY, the Partnership for New York City, the Building Owners and Managers Association of Greater New York, and the Council of New York Cooperatives and Condominiums. All five groups expressed strong support for the TRIA program and the potential devastation to New York City’s economy were the program allowed to expire. Andrew Breslaw, vice president of communications and marketing for the Alliance for Downtown New York, argued that billions, possibly trillions, of dollars worth of commercial loans would be in technical default if TRIA is not renewed beyond 2014.
The remaining groups who testified also did so in favor of a long-term extension. These groups included Willis North America, the Council of Independent Agents & Brokers, AIG, and Marsh. Comments submitted on behalf of RIMS reinforced many of the arguments made by the other advocates. “Terrorism is one of those risks that must be considered in today’s world and insurance coverage for acts of terrorism is a necessary component of mitigating losses from a potential event,” wrote RIMS Board and NYC Chapter Member Lori Seidenberg. “Availability and affordability of this coverage continues to be vital to commercial insurance consumers, but perhaps even more importantly, to the economy as a whole.”
The committee did not take a vote on the resolution during the hearing, but it was clear that it will be supported. While New York City’s support of TRIA will come as no surprise, and may not have a huge impact on the Republican-led U.S. House of Representatives, the hearing did serve to bring added attention to the issue at a time when the House appears to have placed it on the backburner. The issue deserves more urgency from the House as the longer the program’s fate remains in flux, the more uncertainty creeps into the market.