TRIA Background and Purpose
Prior to the terrorist attacks of September 11, 2001, insurance coverage for
losses from such attacks was normally included in general insurance policies
without specific cost to the policyholders. Following the 2001 attacks, such
coverage became very expensive—if insurers offered it at all. Because insurance
is required for a variety of economic transactions, it was feared that the
absence of insurance against terrorism loss would have a wider economic impact.
Private terrorism insurance was largely unavailable for most of 2002, and some
have argued that this adversely affected parts of the economy.
Congress responded to the disruption in the terrorism insurance market by
passing the Terrorism Risk Insurance Act of 2002 (TRIA; P.L. 107–297, 116 Stat.
2322). TRIA created a temporary three-year Terrorism Insurance Program in which
the government would share some of the losses with private insurers if a foreign
terrorist attack occurred. This program was extended in 2005 (P.L. 109–144, 119
Stat. 2660) and 2007 (P.L. 110–160, 121 Stat. 1839). The amount of government
loss sharing depends on the size of the insured loss.
The TRIA program is currently slated to expire at the end of 2014. In the
113th Congress, Representative Michael Grimm has introduced H.R. 508 to extend
the TRIA program's expiration date five years—until the end of 2019. The bill
has been referred to the House Committee on Financial Services, which has yet to
take further action in this Congress. The committee's Subcommittee on Insurance,
Housing, and Community Opportunity held a hearing on TRIA during the 112th