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Terrorism Risk Insurance Act (TRIA)

Last Updated 11/17/2020

Overview:  In the absence of private market innovations and solutions, sustaining a viable private market for terrorism insurance depends on a federal backstop. The NAIC and state insurance commissioners play an essential role administering the terrorism risk insurance program—issuing timely guidance to insurers and consulting with the Federal Insurance Office and its Terrorism Risk Insurance Program Office.

Background:  On December 20, 2019, the President signed into law the Terrorism Risk Insurance Program Reauthorization Act of 2019 (P. L. 116-94) which extended the Terrorism Risk Insurance Program for seven years through December 31, 2027. The 2019 reauthorization:

  • Requires the Secretary of the Treasury to include in its biennial report to Congress an evaluation of the availability and affordability of terrorism risk insurance, including specifically for places of worship.
  • Requires the U.S. Government Accountability Office (GAO) to conduct a study on cyberterrorism risks, including an analysis of whether the states’ definition of cyber liability under a property and casualty line of insurance is adequate coverage for an act of cyber terrorism,  the potential costs of cyber-attacks, the private market’s ability to adequately price cyber risks, and whether the TRIA structure is appropriate for covering cyberterrorism.
  • Adjusts the mandatory recoupment timing.
  • Eliminates outdated language relating to past United States Government reimbursement levels. The reimbursement level of covered terrorism losses exceeding the statutorily established deducible is now (as of January 1, 2020) a fixed 80%. 

Current NAIC Activity:  The NAIC is committed to working with Congress, the Administration, state officials, and the industry to develop a long-term plan to make terrorism insurance available and affordable.  

The NAIC has played an active role in fostering the program and providing assistance to insurers and the federal government as the program is implemented. The NAIC and its members have also testified before both houses of Congress on the need to extend the program.

The NAIC Property and Casualty Insurance (C) Committee and its Terrorism Insurance Implementation Working Group (TIIWG) recently adopted a  model bulletin.  The model bulletin provides guidance to insurers related to rate filings and policy language that state regulators would find acceptable to protect U.S. businesses from acts of terrorism. The model bulletin describes important changes that are contained in the Act and informs insurers regarding whether rate and policy form filings might be needed.

The Working Group adopted the Model Disclosure Form.  Insurers may use the form as drafted, modify the forms to meet individual circumstances, or use forms that are substantially similar. The U.S. Department of the Treasury worked with the Committee and the Working Group to assure that the disclosures satisfy the revised disclosure requirements in the Act.

State insurance regulators began collecting data related to terrorism risk insurance in 2016. Additional information on that data collection process can be found on the NAIC website.

The U.S. Department of the Treasury website provides updated information on the Program, including announcements of all rulemakings, interpretive guidance, and requests for public comments. 

Committees Active on This Topic

Additional Resources

Terrorism Risk Insurance: Overview and Issue Analysis for the 116th Congress (Congressional Research Service, Dec. 2019)

A World Without TRIA: Incalculable Risk (Insurance Information Institute, Sept. 2019)

CIPR TRIA Policy Workshop (NAIC Summer National Meeting, Aug. 2019)

Issue Brief: Terrorism Risk Insurance  
May 2019, Government Relations, NAIC

2019 Terrorism Risk Insurance Report  
May 2019, Marsh

The Terrorism Risk Insurance Act (TRIA) (Congressional Research Services, Feb. 2019)

Report on the Effectiveness of the Terrorism Risk Insurance Program  
June 2018, Federal Insurance Office

Terrorism Risk Insurance: Market Challenges May Exist for Current Structure and Alternative Approaches  
January 2017, Government Accountability Office Report

TRIA Renewed … at Long Last  
February 2015, CIPR Newsletter

TRIA Renewal: Why Are We Waiting?  
April 2014, CIPR Newsletter

News Releases

Testimony and Speeches

Contacts

Media queries should be directed to the NAIC Communications Division at 816-783-8909 or news@naic.org.

Aaron Brandenburg 
Assistant Director, Data Collection and Statistical Analysis 
Phone: 816-783-8271 

NAIC Center for Insurance Policy and Research (CIPR)

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