Schumer Blasts Treasury Department Report On Terrorism Risk Insurance As Slanted

SCHUMER BLASTS TREASURY DEPARTMENT REPORT ON TERRORISM RISK INSURANCE AS SLANTED

Senator: TRIA Report is Off Base from Start to Finish

Schumer: Treasury Missed the Boat on TRIA Report - Anti-Government Ideology Gets in Way of Look at the Facts on the Ground

Terrorism Risk Insurance Coverage Will Cost New York and Other Cities Millions

U.S. Senator Charles E. Schumer, an author of the Terrorism Risk Insurance Act (TRIA), blasted the Treasury Department's report submitted to the Senate Banking Committee on Terrorism Risk Insurance today. The report, ordered by Congress was a review of the program since it was passed into law in 2002.

Schumer stated, "The Administration's ideological slant has gotten in the way of a clear look at the facts on the ground. The Treasury report says that the economy is robust, but misses the fact that large projects cannot get financing without terrorism insurance. Treasury evaluated TRIA in the context of it being a temporary program, but what is happening on the ground is proof that there is a permanent need to extend this critical risk insurance program."

Schumer said, "The report states, 'extending TRIA would have little impact on the economy given its current strength.' TRIA was not passed to jumpstart the economy, it was passed into law to protect the economy and serve as a safety net in case of another successful terrorist attack. TRIA has created jobs, encouraged construction, and provides economic security to businesses- it has enabled companies to operate more confidently in a more secure economic environment."

"The Administration can't have their cake and eat it too. They can't expect to warn of terrorist attacks and not provide the critical insurance programs necessary to rebuild in case of another successful terrorist attack," Schumer continued.

"The Treasury report can point to no evidence that the private market can fill in the potential gaps - and most experts, including Alan Greenspan and the credit rating agencies, say that there are certain types of costs that the government must bear, like violence from abroad or terrorism. Moreover, if TRIA is not renewed, the real estate market would slow to a crawl and every time a new project isn't refinanced or a new proposal to build something large and grand doesn't get the proper insurance coverage, it would slow down a little more," Schumer concluded.

Without terrorism risk insurance, even companies obtaining insurance at exorbitant prices would still receive far less coverage than what they'd receive under their previous policies. This would have a negative impact on businesses trying to create growth and workers trying to keep or find good jobs.

Before September 11, 2001, no one talked about terrorism insurance except insurance agents, developers, and business managers. The costs were minimal and had no effect on employees or any other workers. But then the terrorist attacks of 9-11 occurred.

The Terrorism Risk Insurance Act provides a government-industry program for sharing property and casualty insurance losses - in short, a government backstop. If losses from a terrorist attack are less than $10 billion, the federal government will cover 80 percent of insured losses. And if losses are more than $10 billion, the federal government will cover 90 percent. The bill covers not just insurance companies, but also those who are self-insured.

http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/2005/PR41747.TRIA.063005.html