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.
September 11, 2014: CIAT: Changing Terrorism Threats Highlight Need for TRIA Reauthorization
September 10, 2014: CIAT urges Congress to complete TRIA reauthorization.
September 8, 2014: More than 400 businesses and industry organizations signed a letter urging Members of the House of Representatives to swiftly reauthorize TRIA.
May 7, 2014: The RAND Corporation Releases a Study That Confirms the Terrorism Risk Insurance Act Ensures the Availability of Workers' Compensation Coverage.
April 24, 2014: Higher Education Letter on TRIA Reauthorization.
April 22, 2014: Marsh & McLennan study calls for reauthorization of TRIA.
April 17, 2014: President's Working Group study supports TRIA renewal.
April 16, 2014: National League of Cities Letter.
April 10, 2014: S. 2244, "Terrorism Risk Insurance Program Reauthorization Act of 2014," Introduced to extend TRIA:
- CIAT Applauds Senate Efforts to Extend TRIA
- Senator Schumer Press Release
- Senator Heller Press Release
April 10, 2014: A New RAND Corporation Study Released Today Confirms that TRIA Can Save U.S. Taxypayers Billions of Dollars in the Event of a Large-Scale Terrorist Attack
April 10, 2014: Multi-industry letter to Congress urging TRIA reauthorization - Contains names of 266 businesses, associations and other organizations
March 28, 2014: Congressional Research Service: Issue Analysis and Overview of Current Program
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
Coalition to Insure Against Terrorism
1875 I Street, NW, Suite 600, Washington, D.C. 20006 (202) 739-9454