by Amber N. Johns

Somerville’s congressional representative announced July 15 he introduced a bill reauthorizing and extending federal terrorism insurance, provided by the Terrorism Rick Insurance Act, through 2007.

“The Terrorism Risk Insurance Act has helped make terrorism insurance available and affordable to businesses. We need to act now to extend this successful legislation so that American workers and our cities and towns continue to be protected against possible terrorist attacks,” said Rep. Michael E Capuano, D-Somerville.

The legislation includes provisions to guarantee that insurance policies enacted during the last year of the program do not lose their terrorism coverage before the policy expires. “This makes it easier for businesses to get affordable terrorism insurance,” Capuano said.

Capuano said that the bill also provides mandatory availability for terrorism coverage for the final two years of the program, and makes terrorism re-insurance coverage available to group-life insurance policies.

The stability of the insurance industry and of policyholders was put in jeopardy when insurers and re-insurers lost more than $40 billion as a result of the Sept. 11, 2001, attacks, said Capuano.

“The Terrorism Risk Insurance Act provides a limited federal backstop in the event of another catastrophic terrorist event. This legislation simply extends that federal backstop for a limited time. My proposal would bring some certainty back into the market and allow businesses to plan for their insurance needs,” Capuano said.

“A stable, secure insurance market is vital to the health of our national economy.”