GlobeSt.com UPDATE: Snow Testifies Again on Terrorism Insurance Act Renewal

WASHINGTON, DC-The day after testifying before the US House of Representatives Committee on Financial Services regarding renewal of the Terrorism Risk Insurance Act of 2002, US Department of Treasury Secretary John W. Snow took his testimony to the US Senate Committee on Banking, Housing and Urban Affairs Thursday. He restated the department’s and the White House’s position against renewal of the legislation–as noted in the June 30 report, ” Assessment: the Terrorism Risk Insurance Act of 2002–unless major changes are instituted.

“It is our view that continuation of the program in its current form is likely to hinder the further development of the insurance market by crowding out innovation and capacity building,” Snow told the committee. “Consistent with TRIA’s original purpose as a temporary program scheduled to end on December 31, 2005, and the need to encourage further development of the private market, the administration cannot support a straight extension of TRIA.”

Many in the real estate and mortgage banking industries take issue with some findings outlined in the Treasury’s report, specifically the notion that private markets can mostly provide terrorism insurance on their own. “We’re disappointed in the way the conclusions of the Treasury’s report are being used,” Real Estate Roundtable president and CEO Jeffrey D. DeBoer tells GlobeSt.com. “The report doesn’t present a road map as to how private markets could provide the terrorism insurance.” He says the groups agrees with the study’s conclusion that there is $4 to $6 billion in reisnsurance out there and that the need is substantially more than that to make the economy go. “They believe private markets will fill that gap, but we are extremely skeptical; we see no evidence that private markets can do that. We’re in the business of business and we’d like to operate on something more than just a belief. “