Number: RS21979
Title: Terrorism Risk Insurance: An Overview
Authors: Baird Webel, Government and Finance Division 
Abstract: The three-year program that TRIA created backed up commercial property and casualty insurance, covering up to $100 billion each year after set insurer deductibles. The government would have paid 90% of insured losses over the deductible, with the insurer paying 10%. Responding to concerns that the three-year program was too limited to allow the private sector to develop the capacity to insure terrorism risk, the 109th Congress passed the Terrorism Risk Insurance Extension Act of 2005 (TRIEA) to extend the program two years, leaving it essentially intact while increasing the private sector's exposure to terrorism risk. With less than one year left in the extended TRIA, concerns are again being expressed that the private market will be unable to provide terrorism insurance without a government backstop. Both Chairman Chris Dodd of the Senate Banking, Housing, and Urban Affairs Committee and Chairman Barney Frank of the House Financial Services Committee have indicated that addressing terrorism insurance will be a priority this year. This report provides an overview of related issues, including a summary of the original TRIA and the TRIA extension legislation.
Pages: 5
Date: January 17, 2007