The US Senate voted today 93-4 to reauthorize the Terrorism Risk Insurance Act (TRIA) for an additional six years.
The CRE Finance Council issued a statement noting its position at the forefront of the advocacy effort to renew TRIA today as the CREFC Miami conference was in full swing.
Created following the September 11 terrorist attacks, the law allows the government to repay business costs after a catastrophic attack that causes more than $100m in damages.
The vote came on the heels of the House of Representatives majority 416-5 vote yesterday, and this afternoon CREFC and its delegates anticipated an expeditious authorization by the president.
“The White House in their last communication on the matter signaled their willingness to sign the bill over objections to the unrelated Dodd/Frank provisions in the package,” CREFC said in the email.
CREFC President Stephen Renna added, “This quick action from the new Congress on the heels of the December fumble is a positive for the commercial real estate finance market, which was dealing with tremendous uncertainty following the program’s expiration on December 31.”
Lawmakers had failed to reauthorize the program, leading to its expiration on December 31 and sending jitters through the real estate community.
The law would include the following stipulations as outlined by CREFC:
-6-year reauthorization of the Terrorism Risk Insurance Act (TRIA)
-Increases the program (event) trigger from $100m to $200m over several years
-Does not include controversial bifurcation language that would have treated nuclear, chemical and biological attacks discretely
-Increases the mandatory recoupment surcharge to policyholders to $37.5bn (from the current $27.5bn)
-Includes the NARAB provisions that allow for insurance producers to sell policies across state lines after registering with a Federal licensing program
-Contains relief for end-users that use derivatives to hedge against business risk would be exempted from margin and capital requirements of the Dodd/Frank law