Senate panel unanimously approves extension of Terrorism Risk Insurance Act
A U.S. Senate panel has approved the extension of the federal terrorism insurance initiative. The Terrorism Risk Insurance Act, which was signed into law in 2002, created a backstop for insurance claims relating to acts of terrorism. This initiative is designed to mitigate the risks associated with terrorism occurring within the United States and provides coverage for businesses and any entity that is deemed eligible. A select few insurance companies are allowed to participate in the initiative by providing products specifically designed to guard against the damages associated with terrorism.
Terrorism insurance may still be necessary
The initiative was originally meant to expire in 2005 and again in 2007, but has won extensions from federal lawmakers that have secured its lifetime. The Senate panel that has approved yet another extension for the initiative did so unanimously, suggesting that the terrorism insurance protection provided by the initiative is necessary. While the panel has approved the extension of the insurance initiative, this does not mean that the extension is set in stone.
Federal initiative may have created a favorable environment for the insurance industry
The House of Representatives must review the Terrorism Risk Insurance Act in order to determine whether it is still necessary. Depending on how the House finds the initiative, it may be allowed to expire at the end of the year. Supporters of the federal law claim that it has helped the private insurance industry become more resilient against modern threats. The law may have helped create an environment in which insurance companies can thrive rather than struggle, but this is not a belief that is held by all federal legislators.
Definition of terrorism is beginning to change in the US
Terrorism insurance coverage is not something that is often showcased in the U.S. This is partly due to the fact that acts or terrorism are not common within the country’s borders. Furthermore, the concept of terrorism is beginning to change due to the efforts of opposing political factions. How terrorism is defined by the federal government has a major impact on whether or not the Terrorism Risk Insurance Act is still practical.