January 30, 2002—During the recent Industry Forecast Briefing of the National Association of Real Estate Investment Trusts, (NAREIT), President & CEO Steven Wechsler discussed economic recovery as well as the political climate for terrorism insurance.
Wechsler expressed disappointment in the Senate’s recent failure to act on a federal program to ensure the availability of terrorism insurance coverage, but said he is hopeful there will be Congressional action in the near future.
According to Tony M. Edwards, NAREIT’s Senior Vice President and General Counsel, most policies up for renewal this year will likely exclude terrorism coverage. “The large majority of our member companies did not have a January 1 renewal date,” he explained. “They are spread throughout the year, with June the biggest month for renewals. For the few companies that had January renewals, however, several are having problems with certain coverage and therefore are not able to secure financing or refinancing for projects.”
“We’ve been trying to evaluate the characteristics of the various legislative remedies,” said Wechsler. “Clearly, the duration of such a program and the willingness of lawmakers to provide a backstop will be important to everyone over time.”
The House Financial Services Committee is expected to hold a hearing on terrorism insurance legislation that the REIT and publicly traded real estate industry hopes will show the need for Congress to act. In the meantime, NAREIT is cooperating with the U.S. General Accounting Office by providing information about the possible impact of a lapse in, or gap of, terrorism coverage.
For more information, contact NAREIT.
