By Chris Bragg on Crain’s New York Business
New York City CEO’s—117 of them—signed onto a letter urging Republicans in Congress to reauthorize legislation providing a federal backstop for terrorism insurance. Conservatives are looking to scale back and phase out the program.
More than 100 New York City CEOs are calling on House Republicans in Congress to swiftly reauthorize the Terrorism Risk Insurance Act (TRIA), which provides a federal backstop for insurance coverage in the event of catastrophic losses from terrorist attacks.
The 117 CEOs, organized by the Partnership for New York City, include some of the nation’s largest employers. They say that if no action is taken by Congress, TRIA will sunset at the end of the year and terrorism insurance will be unavailable to businesses.
This would pose a particular problem for New York City, a top target for terrorist attacks, the CEOs say. Following the 9/11 attacks, which inflicted more than $30 billion in insured losses, many business in Lower Manhattan and elsewhere were unable to buy protection, and development slowed.
“America remains vulnerable to international terrorism. TRIA is one of the 21st-century tools that we rely upon to protect American jobs and allow investment to continue, despite the risk of terrorism,” the business leaders write. “With the sunset of this federal program coming up in December, it is already difficult to renew insurance along the lines required by employers and property owners in urban centers.”
The business leaders have some clout with House Republicans, who fundraise from deep-pocketed New York City donors.
Congress created TRIA in 2002. It requires primary insurers to provide terrorism coverage, but the federal government assumes much of the risk in the case of a catastrophic incident. Under the program, the federal government picks up most of the tab after $100 million in damages.
A group of fiscally conservative House Republicans, led by Texas Rep. Jeb Hensarling, is pushing a bill to raise the cap to $500 million, limit the types of attacks covered, and phase out the program after five years. New York Rep. Peter King, who opposes that bill, has said he and some 30 other GOP members would be able to kill the GOP legislation along with Democrats.
A bill reauthorizing the program largely in its current form recently passed the Senate by a vote of 93-4, with U.S. Sen. Charles Schumer leading the efforts. Business leaders hope to find a compromise with House Republicans that’s close to the Senate version.
“The bill that passed in the Senate last week with overwhelming, bipartisan support provides the federal backstop necessary to allow insurers, employers, and property owners to continue to manage terrorism risk,” the business leaders write. “It is important to the business community in New York City and across the nation that the House act swiftly to pass a bill that maintains a program structure that has proven effective and has had no cost to the federal taxpayer.”
The authors of the 9/11 commission report released a study Tuesday saying that the threat of a terrorist attack remains “grave,” amid violence in Iraq, Israel and Syria. The business leaders’ letter was directly to the House leadership: Speaker John Boehner, majority whip Kevin McCarthy and majority whip-elect Steve Scalise. Notably, Mr. Hensarling was not among those who received a copy.
View the letter: TRIA CEO Letter Release
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