Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis [December 11, 2014]   [open pdf - 275KB]

"Prior to the September 11, 2001, terrorist attacks, insurance covering terrorism losses was normally included in commercial insurance policies without additional cost to the policyholders. Following the attacks, this ceased to be the case as insurers and reinsurers pulled back from offering terrorism coverage. It was feared that a lack of insurance against terrorism loss would have a wider economic impact, particularly because insurance coverage can be a significant factor in lending decisions. Congress responded to the disruption in the insurance market by passing the Terrorism Risk Insurance Act of 2002 (TRIA; P.L. 107-297). TRIA created a temporary program, expiring at the end of 2005, to calm the insurance markets through a government reinsurance backstop sharing in terrorism losses. The intent was that this would give the industry time to gather the data and create the structures and capacity necessary for private insurance to cover terrorism risk. TRIA did not require premiums to be paid for the government coverage. Instead, TRIA required private insurers to offer commercial insurance for terrorism risk with the government then recouping some or all federal payments under the act in the years following government coverage of insurer losses."

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CRS Report for Congress, R43619
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