Washington–The governors of 28 states including New York and California have written congressional leaders urging them to extend the federal backstop for terrorism insurance.
Their communication is the latest in a chorus of calls directed at lawmakers as the Dec. 31 deadline nears for expiration of the Terrorism Risk Insurance Act Program.
The letter's signers, who included New York's George Pataki, Arnold Schwarzenegger of California, Florida's Jeb Bush and Bob Taft of Ohio, expressed a "strong belief" that the economy depends on the availability and affordability of terrorism insurance.
"Now, less than two months before its scheduled expiration, we urge you to act quickly and ensure that our businesses can continue to be protected against the threat of terrorist attacks," they wrote.
Without the federal backstop for terrorism coverage provided under TRIA, the governors said that business would likely face market conditions like those in the months after the terrorist attacks of Sept. 11, 2001. "Policyholders will likely pay exorbitantly high premiums for terrorism insurance, or simply be unable to secure it," they said.
Additionally, the governors noted the findings of the Treasury Department's report on the TRIA program which predicted that if TRIA were allowed to expire as scheduled, in the short term there would be less coverage available, very high premiums and a low take-up rate.
"In the absence of any financial protection, a future terrorist attack will have a significant impact on our nation's ability to recover as businesses find themselves without the necessary resources to rebuild their operations," the governors said.
A lack of federal backing for terrorist insurance could also prove damaging to the economy on the international stage as well, the governors said, noting that without TRIA the U.S. would find itself "at a competitive disadvantage against countries with a terrorism insurance program, such as the United Kingdom or Germany, when attempting to attract international private investment."
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