TRIA passes — after a retiring Senator put the kibosh on reauthorizing the Terrorism Risk Insurance Act as part of the Cromnibus bill last month. Thankfully, a new Congress reauthorized the federal terrorism coverage backstop yesterday.
The bill, which demonstrated bipartisan support by a vote of 93 to 4, now awaits President Barack Obama’s signature.
The “Terrorism Risk Reauthorization Act of 2015 (H.R. 26),” does the following:
- extends TRIA for six years;
- incrementally raises the program’s trigger from $100 million to $200 million in total insurance losses beginning 2016;
- increases insurer co-share from 15 to 20 percent.
- raises the aggregate amount the insurance industry has to absorb TRIA eligibility from $27.5 billion to $37.5 billion. To put this in perspective, losses from 9/11, which is about $43 billion would qualify for TRIA. The industry would be responsible for the first $37.5 billion, leaving a balance of $ 5.5 billion for the industry to borrow and pay back.
TRIA passage was especially important for workers’ compensation insurance. Unlike other lines, workers’ compensation cannot limit coverage due to nuclear, biological, chemical or radiological, (NBCR) attacks.
I have written several blogs concerning TRIA — especially the actuarial and workers’ compensation implications. The most blog recent can be found by clicking here.
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