Terrorism Risk Insurance: Background, Reauthorization and Alternative Approaches

Prior to the September 2001 terrorist attacks on the United States, insurers generally did not exclude or separately charge for coverage of terrorism risk. The events of September 11, 2001, changed this as insurers realized the extent of possible terrorism losses. Congress responded to the disruption in the insurance market by passing the Terrorism Risk Insurance Act of 2002 (P.L. 107-297). The goals of TRIA are to (1) protect consumers by addressing market disruptions and ensuring the continued widespread availability and affordability of commercial property/casualty insurance for terrorism risk; and (2) allow for a transitional period for the private markets to stabilize, resume pricing of such insurance, and build capacity to absorb any future losses, while preserving state insurance regulation and consumer protections. The book looks at issues surrounding TRIA.