Terrorism Risk Insurance: Issue Analysis and Legislation (CRS Report for Congress)
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| Release Date |
Revised Nov. 2, 2007 |
| Report Number |
RL34025 |
| Report Type |
Report |
| Authors |
Baird Webel, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Following the September 11, 2001 terrorist attacks, insurance protecting against property losses that might occur in future attacks became costly or unavailable for many businesses. In response, Congress passed the Terrorism Risk Insurance Act of 2002 (TRIA, P.L. 107-297, 116 Stat. 2322), creating a temporary reinsurance backstop that would spread terrorism losses over time and over a wider base of companies and policyholders while having taxpayers absorb some of these losses, particularly in the event of a large-scale terrorist attack. TRIA was limited to commercial property and casualty insurance, covering up to $100 billion each year after set insurer deductibles. The government would have paid 90% of insured losses over the deductible. If the losses were under a certain amount, ranging from $10 billion to $15 billion, the industry would have been required to pay back the government-provided funds through industry-wide recoupments. [â¦] In the 110th Congress, the House passed H.R. 2617 on September 19, 2007. This bill would make substantial changes to TRIA, including adding 15 years to the program; adding group life insurance; requiring that insurers cover nuclear, biological, chemical and radiological attacks; and lowering the program trigger amount to $50 million. A bill that would extend the program only seven years and add domestic terrorism to the program was ordered reported out of committee in the Senate on October 17, 2007. This report provides an overview of TRIA-related issues, including a summary of the current TRIA program as well as the legislation that created and extended the program. It will be updated as major events occur.
