Insurers are calling for the renewal of the Terrorism Risk Insurance Act
The insurance industry has mobilized to support U.S. legislation that would renew the federal backstop for terrorism risk insurance. The endeavor has received the support of more than 400 trade groups that represent various types of businesses. The industry is urging federal lawmakers to approve a legislation that could have a major impact on terrorism insurance throughout the country. Insurers note that the terrorist attacks on 9/11 have fundamentally changed the way they manage risks within the U.S.
TRIA is currently set to expire on December 31 of this year
The Terrorism Risk Insurance Act (TRIA) was initially passed in 2002 and created a backstop for claims that are related to acts of terrorism. TRIA was originally mean to expire in 2005, but was renewed by Congress. The standing expiration date for TRIA is currently set for December 31 of this year. The insurance industry has been petitioning federal lawmakers to renew the legislation for some time, but convincing lawmakers that this is necessary has proven difficult.
Renewing TRIA has become a high priority for the insurance industry
Insurers note that renewing TRIA this month is vital to the development of a longstanding terrorism risk insurance legislation. Congress is only in session for approximately two more weeks before going on recess for mid-term elections. If TRIA is not renewed, insurance companies could find themselves exposed to a great deal of financial risk in regards to acts of terrorism.
Terrorism continues to be a complicated issue in the United States
Terrorism is a complicated subject in the U.S. Since 9/11, there have been very few terrorist attacks within the country’s borders. Indeed, the prevalence of such attacks have been on a sharp decline since 1970, but the potential cost of these attacks has increased over time. There is a certain degree of unpredictability to such attacks, which does not bode well for insurance companies. TRIA is designed to mitigate the risks associated with these attacks and make it possible for insurance companies to manage these risks more effectively.