Terrorism Risk Insurance Program: Current Issues, Legislation, and Background [Updated September 20, 2007] [open pdf - 70KB]
From the Summary: "After September 11, 2001, many businesses were no longer able to purchase insurance protecting against property losses that might occur in future terrorist attacks. Addressing this problem, Congress passed the Terrorism Risk Insurance Act of 2002 (TRIA), creating a temporary three-year program to share future insured terrorism losses with the property-casualty insurance industry and commercial policyholders. The act required insurers to offer terrorism insurance to their commercial policyholders, preserved state regulation of this type of insurance, and directed the Secretary of the Treasury to administer a program for sharing terrorism losses. Once certain conditions were met, the initial program covered 90% of insurer losses up to $100 billion each year. Responding to concerns that three years was insufficient time to allow the private sector to develop the capacity to insure terrorism risk, the 109th Congress passed the Terrorism Risk Insurance Extension Act of 2005 (TRIEA) to extend the program two additional years. TREIA left the program essentially intact while increasing the private sector's exposure to terrorism risk through a higher trigger, higher deductibles, greater industry loss sharing and exclusion of certain lines of insurance. With less than one year left in the extended program, concerns are again being expressed that the private market will be unable to provide terrorism insurance without a government backstop. The House passed TRIA extension legislation (H.R. 2761) by a vote of 312-110 on September 19, 2007. Similar legislation has yet to be introduced in the Senate. This report provides an overview of the current TRIA program, general background on the issue, and a summary of current legislation. It will be updated as legislation is introduced, hearings are held, or other legislative events occur."
CRS Report for Congress, RS22671