CIAT Criticizes Terrorism Reinsurance Paper

WASHINGTON, DC-”Federal Terrorism Reinsurance: An Update” is hardly an update at all, the Coalition to Insure Against Terrorism says. The Congressional Budget Office released the paper as an analysis of changes in the insurance market and the Terrorism Risk Insurance Act of 2002, which is scheduled to expire December 31. TRIA was enacted just over one year after the September 11, 2001 terrorist attack and put in place a federal backstop measure that obliges the government to cover payouts beyond $100 billion of insurers’ liability.

CIAT takes issue with much of the paper’s contents, including the author’s assertion about reinsurers’ response in the event of an attack without TRIA in place. “There are indications that private reinsurers would fill much of the gap in supply left by TRIA’s expiration, but that outcome is not certain,” David Torregrosa, author of the CBO paper, concludes. But such is not the case, CIAT retorts. “Policymakers represented by CIAT have seen little evidence to suggest that reinsurers are any closer to returning to the market they fled after the attack on America,” says CIAT spokesperson Martin L. DePoy, vice president for government relations at the National Association of Real Estate Investment Trusts. Additionally, DePoy claims the conclusions in the study have not changed since the last official assessment.