Insuring Against Terrorism: A Plan for Economic Security
The Terrorism Risk Insurance Act (TRIA) was enacted following the September 11th attacks as a federal plan for economic continuity and recovery after a severe terrorist attack on the United States. Under TRIA, the federal government provides confidence to the private market that terrorism losses will not paralyze economic activity. No federal assistance will be provided unless the terrorist act results in at least $100 million in aggregate insured losses. In absence of TRIA, which ensures industry participation, the federal share of a disaster could be significantly larger than it is as outlined in TRIA. The TRIA is set to expire on December 31, 2014.
The Coalition to Insure Against Terrorism, made up of business insurance policyholders, is urging Congress to reauthorize TRIA.
Insurer Responsibility: If a terrorist attack occurs resulting in at least $100 million in aggregate losses, the insurer will pay claims up to 20% of the insurer’s direct earned premium (of prior year) and 15% of claims above its deductible. As much as $35.5 billion in insured losses may be retained by insurers even before any federal co-pay support.
Policyholders: Commercial policyholders pay the premium for terrorism coverage and retain any individual policy deductibles as applicable. Policyholders bear aggregate losses exceeding $100 billion with no liability for insurers or the federal government.
Federal Role: The federal government will only provide assistance if the act of terrorism results in at least $100 million in aggregate insured losses. Federal assistance is provided only if an insurer has paid out losses exceeding the deductible and will cover only 85% over the deductible. There is a 15% co-share of losses exceeding insurer deductibles.
Taxpayer Protection: For terrorist events that result in aggregate losses up to $27.5 billion, any federal assistance through TRIA must be recouped over time through a surcharge on all commercial policies in covered lines.
March 6, 2014: RAND Corporation releases study showing renewal of TRIA would contribute to improved national security and economic resilience against terror attacks
February 25, 2014: W. Edward Walter, Host Hotels & Resorts's President, CEO and Director, Testifies Before the Senate Banking, Housing and Urban Affairs Committee Regarding Reauthorizing TRIA
February 24, 2014: U.S. Chamber of Commerce Expresses Support for TRIA Reauthorization in Letter to Senate Banking Committee Chairman Johnson and Ranking Member Crapo
February 10, 2014: Important update from Marsh regarding workers’ compensation coverage as uncertainty mounts over the future of the Terrorism Risk Insurance Program Reauthorization Act(TRIPRA)
January 15, 2014: CIAT expresses appreciation to Congresswoman Waters for panel discussion on reauthorizing TRIA
January 7, 2014: Senate Banking Committee Chair and Ranking Member respond to Senators Kirk and Heller's letter on extending TRIA when Congress reconvenes
December 16, 2013: Senators Mark Kirk and Dean Heller encourage Senate to work on extending TRIA when Congress reconvenes in January
December 3, 2013: Report: Threat of Large-Scale Terror Attack in US Still High; NY, Chicago, LA, San Francisco, DC Top List of Targets
November 20, 2013: TRIA commentary in Roll Call newspaper penned by John R. Phillips, President of RIMS
November 13, 2013: CIAT Letter Forwarded to Members of the HFSC Housing and Insurance Subcommittee
November 5, 2013: RIMS's "Terrorism Risk Insurance Act: The Commercial Consumer’s Perspective" report explores the evolution of TRIA while highlighting the importance of its reauthorization
October 28, 2013: Terrorism Risk Insurance Is a Jobs Issue
September 25, 2013: CIAT Expresses Appreciation to Senate Banking Committee for Hearing on Reauthorizing Terrorism Risk Insurance Act
September 19, 2013: CIAT Commends House Financial Services Committee for Holding Hearing on Terrorism Risk Insurance Act
September 16, 2013: CIAT Submits TRIA Comments to President’s Working Group on Financial Markets
August 2, 2013: Fitch Warns of Strong Market Impact if TRIA Isn't Reauthorized
July 18, 2013: Terrorism Insurance Still Needs Federal Backstop
June 17, 2013: CIAT Endorses New York City Resolution Supporting TRIA Extension
May 23, 2013: Bipartisan Bill Introduced to Extend TRIA for 10 Years
May 1, 2013: Analysis of Terrorism Risk Insurance Program
April 30, 2013: CIAT Update
Read a copy of the Marsh's latest report on the terrorism insurance marketplace.
Read a copy of the power point presentation given by Ben Tucker, Sr. VP with Marsh.
Read a copy of Ed Walter’s remarks.
February 13, 2013: Senate Finance Committee Holds Confirmation Hearing on the Nomination of Jacob J. Lew to be Secretary of the Treasury
February 6, 2013: CIAT Endorses Legislation to Reauthorize TRIPRA
Read CIAT Letter in support of Rep. Grimm's proposal to extend TRIA, dated January 25, 2013.