With an eye on the looming expiration of the Terrorism Risk Insurance Extension Act next year, policyholders–led by commercial real estate interests–are taking the lead in drafting proposals for a politically-palatable framework for ongoing federal involvement.
Under the proposal drafted by the Real Estate Roundtable, the government's role would shift from a direct reinsurer of terrorism losses to a partner in a state-chartered mutual reinsurer.
"The current program is a recoupment system," explained Clifton E. Rodgers Jr., senior vice president of the Roundtable. "This is an advanced funding mechanism." He said the "brand new" proposal is being drafted "because we realize the current program is expiring Dec. 31, 2007, and there appears to be no political momentum to merely do another extension of TRIA."
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