A bill to extend the Terrorism Risk Insurance Act (TRIA) through 2034 recently cleared a U.S. House committee with bipartisan support, advancing the measure for consideration by the full House and Senate.
Congress enacted TRIA in 2002 following the Sept. 11, 2001, terrorist attacks. The law created a federal backstop that shares catastrophic terrorism losses between insurers and the federal government. Lawmakers designed the program to support stability in private insurance markets and other industries in the event of large-scale terrorism losses. Since its inception, Congress has reauthorized TRIA four times. To date, no events have triggered the federal backstop.
TRIA is scheduled to expire at the end of 2027. As a result, many commercial property and casualty insurers have begun preparing for the possibility that the program could lapse. Risk and insurance leaders have called for early legislative action to ensure continuity.
Will Melofchik, CEO of the National Conference of Insurance Legislators, addressed the issue in a statement last year.
“American businesses must be provided with the essential coverage to successfully operate in today’s uncertain global environment,” Melofchik said. “Failure by Congress to extend TRIA would likely result in the inability of insurers to offer coverage for future catastrophes resulting from terrorism, making terrorism risk insurance unavailable and unaffordable.”
Andrew N. Mais, former Connecticut insurance commissioner and past president of the National Association of Insurance Commissioners, testified on behalf of the NAIC about the program’s importance.
“Businesses and consumers that live, work, and shop in communities in every state benefit from a stable insurance sector, which provides commercial terrorism insurance only because TRIA exists as a backstop,” Mais said.
He added that, without TRIA or a comparable solution, private insurance carriers would not make meaningful capacity for affordable commercial terrorism coverage available.
As drafted, the bill would extend the program through 2034. In addition, it would raise the minimum loss threshold from $5 million to $10 million beginning in 2029. The legislation would also introduce a transparency requirement, directing the U.S. Department of the Treasury to publish a notice in the Federal Register no later than 30 days after initiating the terrorism determination process.
Lawmakers may revise the bill as it advances through the legislative process.
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