Hearing of the House Financial Services Committee's Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises - Examining a Legislative Solution to Extend and Revise the Terrorism Risk Insurance Act (TRIA)
"Mr. Chairman, as an original cosponsor of the Terrorism Risk Insurance Revision and Extension Act, I strongly support the legislation. I support the incorporation of domestic acts of terrorism and the inclusion of group life insurance into the Terrorism Risk Insurance Act. Most important of all, Mr. Chairman, I strongly support the inclusion of so-called "retroactive reset" language that lowers the deductibles and triggers for areas that have already suffered terrorist attacks. The inclusion of this reset language is absolutely vital to our country.
On September 11th, fundamentalist maniacs struck the Twin Towers, causing incredible, horrific destruction. Though the casualty toll was, and still is, devastating to us, and the financial losses went well into the billions, it took only days for New York - and the country - to commit ourselves to rebuilding Ground Zero to demonstrate our resilience and resolve in the face of terrorists. Had retroactive reset language not been included in this legislation, the terrorism insurance market would simply have lacked the capacity to enable Ground Zero to be rebuilt. Without the inclusion of retroactive reset language, we would have given Osama bin Laden, or any other terrorist, a veto on where we can and cannot build in the United States. As a matter of principle, we simply can not allow terrorists to dictate either the place of our markets, or the prices in them.
I'm also very pleased that bill extends TRIA for 10 years, through the end of 2017. As we heard at our subcommittee's field hearing in New York City in March, a 10 year extension is the absolute minimum that many experts in the developing, insurance and reinsurance sectors feel is adequate. The fact that we are now starting with a base-text that includes a longer-term extension is a measure of Chairman Kanjorski's and Chairman Frank's commitment to meeting the concerns of the Members of the Committee. I want to sincerely thank them both.
One of the chief obstacles to any large-scale business plan is uncertainty, and this is particularly true for a multi-million or multi-billion dollar real estate development project, the kind that breath new life into our cities. Designing, securing capital, and then contracting for construction, is a multi-year process. If we want these kinds of projects to go forward, then there is simply no alternative to providing a long-term terrorism insurance backstop. Ultimately, I think we need to reauthorize TRIA for at least 15 years, a period that will give banks, insurers, developers and reinsurers the commitment they need to take the risks that will keep our economy moving forward with confidence. When the full committee marks up the Terrorism Risk Insurance Revision and Extension Act, I hope all of my colleagues will support the bi-partisan amendment that will be offered by Mr. King, which would provide for a 15-year reauthorization.
Mr. Chairman, I look forward to hearing from our witnesses this morning, and I yield back the balance of my time."