GlobeSt.com UPDATE: Bush Signs TRIA Extension Into Law

WASHINGTON, DC-President Bush has just enacted the Terrorism Risk Insurance Extension Act of 2005. The legislation that pushes back the expiration date of the Terrorism Risk Insurance Act of 2002 from Dec. 31, 2005, to Dec. 31, 2007. Bush’s signing of the extension came just days after Congress passed its compromise version of the bill, which included a series of amendments to the original legislation.

TRIA was crafted as a response to economic damage caused by the Sept. 11 terrorist attacks; damage that occurred partially as a result of the cessation or cancellation of real estate construction and development projects due to the sudden inability for companies to acquire–or afford–terrorism coverage. In addition to adding two years to the expiration date of TRIA, the extension law contains new provisions, among them the boosting of TRIA’s activation level from $5 million to $50 million in 2006, and then to $100 million in 2007. Other stipulations include the increase in deductibles and co-payments, which will augment the insurance industry’s responsibility; the repayment of 25% of federal aid for payments in 2006 and 27.5% for 2007 payments; and the creation of the President’s Working Group on Financial Markets, which is charged with developing long-term solutions to supplant TRIA.

“Congress has agreed on legislative language that meets the critical goals set out by Treasury secretary John W. Snow when he delivered the Treasury’s TRIA report in June: a significantly reduced TRIA program, more room for private sector innovation, greater protections for the taxpayer, and recognition of the temporary nature of the program,” Treasury under secretary Randal Quarles says in a Dec. 16 statement following Congress’s settlement on a compromise bill; the US Senate’s version was more closely aligned to the Administration’s preferences. “Many thought these goals were not achievable when this debate began, but the House and Senate worked very constructively to achieve this outcome, and we think the American taxpayer can be satisfied with the result.”