First passed by Congress in 2002 in response to the terrorist attacks of September 11, 2001, the Terrorism Risk Insurance Program (TRIA) was created to provide a federal backstop for terrorism insurance coverage, which had become largely unavailable or cost prohibitive. The program was renewed in 2005 and again in 2007 (as TRIPRA), and the current extension is due to expire in December 2014.
In today’s letter, AH&LA President and CEO Katherine Lugar noted, “Without TRIPRA, the lodging industry will face substantial difficulty in obtaining terrorism risk coverage which is often required for securing loans for development projects … Importantly, TRIPRA protects American taxpayers as the program mandates that ‘first dollar losses’ be paid by insurers and policy holders and is only triggered in the event of a major event and after individual insurer loss thresholds are met.”
The lodging industry is concerned that the terrorism risk market is not prepared to provide coverage without the private/public partnership provided through TRIPRA. The program has allowed terrorism insurance coverage prices to stabilize and for adequate coverage to be secured with minimal risk to taxpayers.
The House Financial Services Committee will hold the first in an expected series of hearings on TRIA this morning at 10:00 a.m.
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