A bipartisan effort is underway in the Senate with the introduction of a bill to extended the federal terrorism risk insurance program for seven years.
A federal backstop for terrorism risk was first initiated late in 2002 by the Terrorism Risk Insurance Act (TRIA) to respond to insurers’ exclusions of terrorism risks from commercial property/casualty insurance policies following losses from 9/11. The change put construction projects on hold since financers required the insurance.
This latest reauthorization bill extends the terrorism insurance program for seven years. TRIA has been reauthorized several times, the latest at the end of 2019. It is due to expire again on Dec. 31, 2027.
Senators Dave McCormick, R-Pa., and Tina Smith, D-Minn., Thom Tillis, R-N.C., and Ruben Gallego, DAriz., joined more than 20 Republican and Democrat cosponsors to introduce the Terrorism Risk Insurance Program Reauthorization Act of 2026 on April 28 in the Senate Committee on Banking, Housing, and Urban Affairs.
“TRIA is a proven public-private partnership that helps ensure the continued availability and affordability of terrorism risk insurance, supporting construction, development, and economic activity nationwide,” said Sam Whitfield, APCIA’s senior vice president of federal government relations and political engagement, in a statement. “We urge the committee to advance this legislation and the full Senate to take action as soon as possible to avoid any potential market disruptions.”
Related: Insurance Industry Reps Back Reauthorization of Federal Terrorism Backstop
To begin the year, a similar bill was introduced in the House.
Some changes to the program at past reauthorizations, plus increases in the insurance premium base, have reduced federal exposure to the risk. The legislation requires insurers to offer terrorism coverage while the industry has the assurance that if losses from a certified terrorism event reach a certain thresholds (the event needs to exceed $5 million in losses and $200 million in industry losses), the government will step in.
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