Aon Agrees With Fitch Report Predicting CMBS Disruption if TRIA Expires
03 Giugno 2005 - 12:28AM
PR Newswire (US)
Aon Agrees With Fitch Report Predicting CMBS Disruption if TRIA
Expires Commercial Real Estate Benefits if TRIA Extended CHICAGO,
June 2 /PRNewswire-FirstCall/ -- A recent report by Fitch Ratings
suggesting a benefit to the U.S. commercial real estate market if
Congress extends the U.S. Terrorism Risk Insurance Act (TRIA) for
two more years when it expires on Dec. 31, 2005, is "right on
point," according to an Aon expert. (Logo:
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO ) "Aon
completely agrees with Fitch's analysis of the potential impact on
the real estate loan origination and servicing market if TRIA
expires," said Aaron Davis, a vice president in National Property
Syndication. "In fact, the issue could be more serious than it was
immediately after 9/11 as many pre- 9/11 loan agreements did not
specify the need for terrorism coverage." The Fitch report
predicted that a potential TRIA expiration would also adversely
affect commercial mortgage-backed securities (CMBS) servicers, who
currently enforce the inclusion of terrorism coverage on the loans
they service. Because of changes in mortgage loan documents, the
servicers may have a more difficult time demanding terrorism
coverage if TRIA is not extended. Davis said that currently, most
of the new loans include specific language about terrorism
insurance requirements. "Many of these commercial loans allow the
borrower to stop buying terrorism coverage if the costs are more
than two times their 'all-risk' property pricing," Davis says. If
premiums for terrorism coverage go up, the Fitch report stated that
servicers may no longer be able to rely on the language of the loan
documents to enforce the terrorism insurance requirements, and this
may result in an unnecessary disruption to the CMBS market. Aon
Corporation (NYSE:AOC) ( http://www.aon.com/ ) is a leading
provider of risk management services, insurance and reinsurance
brokerage, human capital and management consulting, and specialty
insurance underwriting. There are 47,000 employees working in Aon's
500 offices in more than 120 countries. Backed by broad resources,
industry knowledge and technical expertise, Aon professionals help
a wide range of clients develop effective risk management and
workforce productivity solutions. Contact: Al Orendorff
312-381-3153 This press release contains certain statements related
to future results, or states our intentions, beliefs and
expectations or predictions for the future which are
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from either
historical or anticipated results depending on a variety of
factors. Potential factors that could impact results include:
general economic conditions in different countries in which we do
business around the world, changes in global equity and fixed
income markets that could affect the return on invested assets,
fluctuations in exchange and interest rates that could influence
revenue and expense, rating agency actions that could affect our
ability to borrow funds, funding of our various pension plans,
changes in the competitive environment, changes in commercial
property and casualty markets and commercial premium rates that
could impact revenues, changes in revenues and earnings due to the
elimination of contingent commissions, other uncertainties
surrounding a new compensation model, the impact of regulatory
investigations brought by state attorneys general and state
insurance regulators related to our compensation arrangements with
underwriters and related issues, the impact of class actions and
individual lawsuits including client class actions, securities
class actions, derivative actions, and ERISA class actions, the
cost of resolution of other contingent liabilities and loss
contingencies, and the difference in ultimate paid claims in our
underwriting companies from actuarial estimates. Further
information concerning the Company and its business, including
factors that potentially could materially affect the Company's
financial results, is contained in the Company's filings with the
Securities and Exchange Commission.
http://www.newscom.com/cgi-bin/prnh/20041215/CGW049LOGO
http://photoarchive.ap.org/ DATASOURCE: Aon Corporation CONTACT: Al
Orendorff of Aon Corporation, +1-312-381-3153 Web site:
http://www.aon.com/
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