Insurance Updates

In a bill signed by the President, Federal terrorism insurance has been extended another two years. This program was initiated after September 11th, 2001 to ensure the availability of reasonably priced policies for property owners. Some believe that the federal role is vital for keeping financing flowing to commercial real estate. The threshold for losses increased from $5 million to $50 million with the new extension and will increase to $100,000,000 in 2007.

The US House Financial Services Committee has moved forward with the development of the Louisiana Recovery Corp, an independent agency to spur rebuilding of the Gulf areas hit by hurricanes last year. The LRC would relieve hurricane victims of up to $500,000 in mortgage obligation if home owners transfer title to the LRC. The funds would be gained from proceeds of Treasury bond issues. The buildings would be rehabilitated and sold to private developers through a competitive bidding process. The bill, H.R. 4100, denies the corporation eminent domain powers.