NAR, MBA Applaud Senate Passage of Terrorism Insurance Bill

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Federal government becomes insurer of last resort.
RISMEDIA, Nov. 21?The National Association of Realtors? and The Mortgage Bankers Association of America both applauded the U.S. Senate for passing legislation that creates a federal backstop for terrorism insurance.

The legislation was approved by the Senate this week, cleared the U.S. House of Representatives last week, and now goes to President Bush, who has made this bill a top priority and has promised to sign it. The bill represents a major victory for Realtors? and culminates a year of coordinated industry efforts, according to NAR.

The Terrorism Risk Protection Act, H.R. 3210, will make the federal government the insurer of last resort for the next three years by covering 90% of the cost of a future terrorist attack for losses over $10 billion to $15 billion. The legislation, which will pay up to $100 billion in claims, also mandates that property and casualty insurers offer traditional terrorism insurance in all 50 states.

The current shortage of adequate and affordable terrorism insurance has severely reduced and restricted commercial real estate transactions, making it increasingly difficult to operate or acquire properties, build new projects and find appropriate financing. Over $15.5 billion worth of real estate projects in almost 20 states have been stalled or cancelled due to the ongoing lack of terrorism insurance, according to a recent survey.

“We applaud the Senate for passing legislation that will address the current terrorism insurance crisis. The lack of available and affordable terrorism insurance has severely hampered the real estate and construction industries since September 11th,” NAR President Cathy Whatley said. “This legislation will help revive real estate and construction projects that had been previously stalled due to the lack of terrorism insurance, thus creating new jobs and boosting our economy. This is a major victory for American workers, homeowners, business owners and the marketplace in general.”

The legislation creates a federal government reinsurance backstop that will help spur the economic recovery that has remained fragile since the tragic events of September 11, added The Mortgage Bankers Association of America (MBA).

?The action Congress took ? to pass terrorism insurance legislation is the right pain medication for an economy still suffering from the aftershocks of last fall?s terrorist attacks,? said MBA Chairman John A. Courson. ?It will help move billions of dollars in commercial property deals to closure that were delayed or cancelled because of the uncertainty of adequate or affordable terrorism insurance. That?s very good news for the economy.?

?MBA has aggressively advocated a federal government reinsurance backstop, working in close cooperation with our partners in the Coalition to Insure Against Terrorism,? said Courson. ?We are pleased that our voices were heard and that the size and scope of the economic impact was realized by Congress. We can now all move forward with greater focus to re-charge our nation?s economy.?

For additional information, visit www.Realtor.org or

www.mbaa.org.

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