Fitch Ratings is advocating the extension of the Terrorism Risk Insurance Act for two more years, arguing that market disruptions are likely if the backstop is not extended beyond its Dec. 31, 2005 expiration."There are no guaranties that availability of coverage will not be as serious a problem as it was before TRIA passed, which underscores the importance of a long-term solution," said Richard Carlson, a Fitch director. Mr. Carlson said he expects that, in the absence of the federal backstop, pricing could become an issue again and cause the price of the insurance to rise. This would especially affect high-profile "trophy" properties in major cities. And commercial mortgage servicers could have a more difficult time enforcing terrorism insurance coverage requirements, he said. The rating agency can be found online at http://www.fitchratings.com.
