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Terrorism Risk Insurance: Program Changes Have Reduced Federal Fiscal Exposure

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Report Type Reports and Testimonies
Report Date April 20, 2020
Release Date April 20, 2020
Report No. GAO-20-348
Summary:

After the Sept. 11 attacks, insurers generally stopped covering terrorism risk. Through the Terrorism Risk Insurance Act, Congress sought to ensure available, affordable commercial insurance for this risk. Under this program, the government and insurers share losses.

Since 2003, the share of any losses insurers would pay has increased and the federal government’s share (and related fiscal risk) has decreased.

Some insurers may not fully understand program parameters, such as how the Treasury Department determines when government participation starts and when its payment limit has been reached. We recommended Treasury clarify this for insurers.

Terrorism Risk Insurance Act Loss Sharing Changes

Two pie charts showing 10% insurer and 90% government in 2003 and 20% insurer and 80% government in 2020

Two pie charts showing 10% insurer and 90% government in 2003 and 20% insurer and 80% government in 2020

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