From the Document: "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. The insured losses on all insurance lines from the 9/11 attacks exceeded $50 billion in current dollars, an amount well above other insurance industry experiences with terrorism losses. [...] Following September 2001, insurers and reinsurers pulled back from offering terrorism coverage. Some observers feared that a lack of insurance against terrorism loss would have a wide 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. [Public Law] 107-297). TRIA created a temporary program, initially set to expire at the end of 2005, to calm markets through a government reinsurance program sharing in terrorism losses. This program was intended to give the insurance industry time to gather the data and create the structures and capacity necessary for private insurance to cover terrorism risk. TRIA did (and does) not cover terrorism losses directly but instead reimburses private insurers for a portion of their losses. The act does not require premiums to be paid by private insurers for the government coverage. However, it does require private insurers to offer commercial insurance for terrorism risk, which private insurers were not willingly offering prior to TRIA's enactment."
CRS In Focus, IF11090
Congressional Research Service: https://crsreports.congress.gov/