In case the Terrorism Risk Insurance Act is not renewed this year, Fitch Ratings plans to look more closely at fusion deals, according to Fitch managing director Daniel Chambers, who was a panelist at the Commercial Mortgage Securities Association's annual convention in New York.Mr. Chambers said he believes there is less likelihood of force-placement of terrorism insurance coverage because some loan documents now have caps in place on the cost of insurance that has to be taken out. Stacey Berger, executive vice president of Midland Loan Services, is seeing more flexibility in loan documents. Although there will be "constraints on the availability of insurance," he said he expects the market to stabilize over time. "The question is, will the transition be relatively benign?" Mr. Berger noted. The litigation that servicers have been involved in since 9/11 relating to force-placement of terrorism insurance has clearly put them "in a better place," according to Mr. Berger. Tricia Hall, a senior vice president at Lehman Brothers, also agreed that loan documents are "dictating what to do" since 9/11.
