The U.S. House of Representatives has passed the Terrorism Risk Insurance Revision and Extension Act of 2007

The U.S. House of Representatives has passed the Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA), by a vote of 312 to 110.

The legislation will extend the Terrorism Risk Insurance Act (TRIA) for fifteen years and help spur the further development of a private market for terrorism risk insurance. After the 9/11 terrorist attacks, many insurance companies excluded terrorism events from their insurance policies. As a result, Congress passed TRIA as a three year temporary program in 2002, which created a federal backstop to protect against terrorism related losses. In 2005, Congress extended the program for two additional years. TRIA is now set to expire at the end of this year unless Congress acts again to extend the law.

“TRIA has helped make terrorism insurance available and affordable to businesses, particularly those in our major urban areas. Improving and extending this program will help spur America’s continued economic development by providing certainty that terrorism insurance will be available for years to come.

Congressman Mike Capuano

Congressman Mike Capuano, said: “TRIA has helped make terrorism insurance available and affordable to businesses, particularly those in our major urban areas. Improving and extending this program will help spur America’s continued economic development by providing certainty that terrorism insurance will be available for years to come.”

Since its enactment, TRIA has ensured the availability of affordable terrorism risk insurance in the marketplace and thereby fostered continued urban development and real estate development in the United States. While the TRIA program has successfully kept terrorism insurance affordable, the President’s Working Group on Financial Markets’ most recent report concluded that a private market for terrorism reinsurance is virtually nonexistent - especially with regard to nuclear, biological, chemical, and radiological (NBCR) acts of terrorism. The Terrorism Risk Insurance Revision and Extension Act of 2007

TRIREA includes provisions to:

Extend TRIA for 15 years with current co-payments and deductibles for conventional terrorism acts;

Expand TRIA’s “make available” requirement to include NBCR coverage;

Change TRIA’s definition of act of terrorism to include acts of domestic terrorism;
Set the program trigger at $50 million;

Add group life insurance to the lines of insurance for which terrorism coverage must be made available;

Decrease deductibles for terrorist attacks over $1 billion and decrease the trigger after such events; and,

Continue to require studies of the development of a private market for terrorism risk insurance.

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