WHEREAS, following the terrorist acts in 2001, a pervasive uncertainty in the insurance markets occurred regarding potential liability associated with future terrorist attacks and the threat posed by potential acts of terrorism; and

WHEREAS, the threat of terrorist attacks has not diminished nor can it be expected to in the immediate future; and

WHEREAS, the primary insurance market has not yet fully recovered after the attacks of September 11th and primary insurance coverage for a chemical, biological or dirty bomb attacks remains unavailable; and

WHEREAS, a significant percentage of the outstanding commercial real estate debt on shopping center, tourist attractions, infrastructure and transportation facilities, or office buildings in communities all across the United States is required to have terrorism insurance as part of their mortgages; and

WHEREAS, an inadequate supply of terrorism insurance reduces the availability of loan capital for commercial real estate, increases borrowing costs, and undermines economic growth, including employment in the construction and real estate sectors; and

WHEREAS, the U.S. Conference of Mayors at its 2002 Annual Meeting held in Madison, Wisconsin, adopted a resolution urging Congress and the Administration to pass legislation to provide federal help insuring against a catastrophic terrorist attack in the future; and

WHEREAS, Congress acted in November 2002 by enacting the Terrorism Risk Insurance Act; and

WHEREAS, on May 21, 2004, the U.S. Conference of Mayors sent a letter to the Treasury Secretary urging the extension of the “make available” provision of the Terrorism Risk Insurance Act upon which the Secretary acted favorably and extended that provision so that insurers were required to continue to provide terrorism coverage for commercial real estate on par with coverage for other perils; and

WHEREAS, the federal terrorism insurance program mandated by the Terrorism Risk Insurance Act is set to expire on December 31, 2005, unless it is extended by Congress; and

WHEREAS, the expiration of and uncertainty created in the commercial real estate market by the possibility that federal terrorism insurance program will expire at the end of the year, is creating the threat that the record volume of commercial real estate financing in 2005, will have undue risk and exposure since volumes are outpacing the terrorism insurance capacity; and

WHEREAS, Congress is now considering legislation to extend and/or make permanent the federal terrorism insurance program,

NOW, THEREFORE, BE IT RESOLVED, that the U.S. Conference of Mayors reaffirms its support for the continuation of a federal terrorism insurance program; and

BE IT FURTHER RESOLVED, that the U.S. Conference of Mayors calls upon Congress to act expeditiously on legislation to extend and/or make permanent the federal terrorism insurance program prior to its expiration.

©2005 The U.S. Conference of Mayors
Tom Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Tel. 202.293.7330 ~ Fax 202.293.2352