House Panel Reauthorizes Terrorism Risk Insurance Act
The House Financial Services Committee on October 30 passed a bipartisan seven-year reauthorization of the Terrorism Risk Insurance Act. TRIA provides a federal backstop for insurance claims caused by acts of terrorism. The House bill would extend the current TRIA program for seven years. Currently, TRIA only covers loss caused by physical damage. Although the bill does not add cyber threats into the coverage, it would require the U.S. Government Accountability Office to study the risks posed by cyber terrorism and would also require the U.S. Treasury Department to report on risks to places of worship.
The current TRIA is set to expire on December 31, 2020. Commercial insurance clients argue that they need the coverage not only to protect themselves against catastrophic risks, but also to provide security that is now demanded by many lenders.
There has never been a claim against TRIA since its inception in 2002, but experts and lawmakers agree that it would serve an extremely important role should a high damage terrorist attack occur.
The legislation is expected to pass the full House of Representatives soon and then head to the Senate for consideration. While time is short for Senate action this year, there is a possibility that Senate Republican leadership may prioritize TRIA as a vital priority and pass it quickly.