Last month, the House voted to reauthorize the Terrorism Risk Insurance Act (TRIA), which is set to expire on December 31, 2020. The bill also passed out of the Senate Banking, Housing, and Urban Affairs Committee and will head to the Senate floor for a full body vote before the President signs it. We are encouraged to see progress on this important issue, which is critical to accurately assessing both risks and potential claims in the wake of an unfortunate incident like a terrorist attack. TRIA is critical for policyholders, insurers, and the whole U.S. economy.
The data on terrorist-linked incidents per year shows a difficult trend in the United States — in 2017, there were more than twice the number of incidents in the U.S. than in 2000. Because of the uncertain nature of terrorist attacks, accurately calculating risk can be difficult, which in turn can jeopardize coverage for businesses and organizations in high-risk locations.
In 2002, following the devastating September 11th terrorist attacks, TRIA was signed into law to help address these issues by providing a federal backstop if damages from a terrorist attack exceed a certain threshold. Since then, lawmakers have reauthorized it twice, understanding the importance of the policy in providing stability and continuity for policyholders and underwriters. We are encouraged that Congress is moving towards reauthorizing TRIA for a third time and are hopeful the President will soon sign it into law.
A timely TRIA reauthorization means insurers like Zurich can offer continued coverage to our customers. Businesses, especially in industries like construction, energy, and real estate, can expand with the certainty of terrorism coverage. Beyond just financial impact, the stability of the TRIA program is critical for broad U.S. economic growth as a risk-mitigation tool for businesses around America.
In 2018, the Treasury Department reported that TRIA “has made terrorism risk insurance available and affordable in the United States, and the market for terrorism risk insurance has been relatively stable for the past decade.” We applaud the bipartisan effort of lawmakers to ensure stability for businesses, organizations, underwriters, and the broader economy by making progress on this critical piece of legislation.
By: Gregg Sheiowitz
Assistant Vice President Federal Affairs, Zurich NA