Policy Issues
TRIA - Terrorism Risk Insurance Act

 Developing an Effective, Long-Term Terrorism Risk Insurance Program 

The Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) is scheduled to sunset on Dec. 31, 2020. 

Originally enacted in 2002, in response to the inability of insurance markets to predict, price and offer terrorism risk coverage to commercial policyholders, the Terrorism Risk Insurance Act (TRIA) has been extended in 2005, 2007 and again in 2015 – following a 12-day lapse when Congress failed to complete their work on reauthorization at the end of 2014. 

FIO TRIP report cover x220 

Report on the Overall Effectiveness of the Terrorism Risk Insurance Program” was released June 30, 2018 by the U.S. Department of the Treasury’s Federal Insurance Office (FIO).

TRIA is essential for commercial real estate as lenders require “all risk” insurance coverage – including terrorism coverage – to cover the risk of loss to the collateral. At virtually no cost to the taxpayer, TRIA has allowed our economy to move forward even in the face of terrorist threats.  

A June 2018 report by the Treasury’s Federal Insurance Office (FIO) entitled Report on the Overall Effectiveness of the Terrorism Risk Insurance Program concluded:

  • The TRIA Program generally has been effective in making terrorism risk insurance available and affordable in the insurance marketplace.

  • Treasury has not observed any aspects of the Program (either based upon the collected data or operation of the Program generally) that have had the effect of discouraging or impeding insurers from providing P&C insurance in general, or coverage for acts of terrorism specifically.

  • The Program serves as an important backstop to workers’ compensation insurance, given that under state law, workers’ compensation insurance must cover terrorism risk, is not subject to limits of liability, and cannot exclude causes of loss posing extreme aggregation risks.

  • Treasury’s estimate of total earned premiums for terrorism risk insurance from 2003 to 2017 is approximately $37.6 billion (excepting captive insurers), which is between 1 and 2 percent of the total premiums earned in the TRIP-eligible lines of insurance during that period. 
  • Maintaining TRIA is critical to protecting the economy from potentially catastrophic losses and the kind of paralysis that ensued after 9/11. It is also critical to ensuring the continued availability of credit for commercial real estate, since terrorism insurance coverage is required by lenders as part of most loan covenants. 
    Hubbard-TRIA-study-coverx200

      A report entitled, The Economic Importance of Federal Participation in Terrorism Risk, was released Sept. 14 , 2004 by R. Glenn Hubbard, dean of Columbia University’s Graduate School of Business and former chairman of the White House Council of Economic Advisers; and Bruce Deal, managing principal at Analysis Group, Inc., an economic, financial, and business strategy consulting firm.



  • A September 2004 report, The Ecconomic Importance of Federal Participation in Terrorism Risk, was co-authored by R. Glenn Hubbard, dean of Columbia University’s Graduate School of Business and for-mer chairman of the White House Council of Economic Advisers; and Bruce Deal, managing princi-pal at Analysis Group, Inc., an economic, financial, and business strategy consulting firm. In a key finding likely to factor in the upcoming TRIA debate, the authors state that “fundamental issues spe-cific to terrorism. . . make these risks very difficult for private insurers to fully absorb,” and that “es-timating the likelihood and location of such extreme events is virtually impossible.”

  • The staggering economic impact of this market condition must not be forgotten. A Real Estate Roundtable study of the 14-month post-9/11, pre-TRIA period revealed that more than $15 billion in real estate related transactions were either stalled or cancelled because of a lack of terrorism insurance. The White House Council of Economic Advisors concluded that approximately 300,000 jobs were lost during that period. TRIA was intended to ensure that the economy was strong enough to withstand a future attack. That purpose remains as important today as it was in November 2002.

  • The Roundtable is a leader in the Coalition to Insure Against Terrorism (CIAT) – a broad coalition of commercial insurance consumers formed after 9/11 advocating for the extension of TRIA. 
Working with the FIO, the TRIA Advisory Committee on Risk-Sharing Mechanisms (ACRSM); the insurance industry; our policyholder coalition (CIAT); and Congressional and Administration policymakers, The Roundtable is focused on developing an effective, long-term approach for a federal terrorism risk insurance program.   Such a long-term program should enable policyholders to secure the terrorism risk coverage they need without facing periodic renewals by the federal government. 

Terrorism Risk Insurance – Roundtable Weekly reference:   

 07/08/2016      Terrorism Risk Insurance 
TERRORISM RISK INSURANCE - July 8, 2016 Roundtable Weekly 
Treasury Releases Report on Terrorism Risk Insurance Program’s Effectiveness and Recommends Premiums Be Retained for Future Claims   A “Report on the Overall Effectiveness of the Terrorism Risk Insurance Program” released June 30 by the U.S. Department of the Treasury’s Federal Insurance Office (FIO) ....  

 06/03/2016      Capital and Credit;Terrorism Risk Insurance
TERRORISM RISK INSURANCE - June 3, 2016 Roundtable Weekly 
Coalition to Insure Against Terrorism Details Concerns Over Proposed TRIA Changes 

 01/16/2015      Terrorism Risk Insurance
TERRORISM RISK INSURANCE - January 16, 2015 Roundtable Weekly 
Six-Year TRIA Renewal Becomes Law After President’s Signature and Overwhelming Bipartisan Passage by House and Senate 

 01/09/2015      TRIA - Terrorism Risk Insurance Act;Terrorism Risk Insurance
TERRORISM INSURANCE - January 9, 2015 Roundtable Weekly 
Over 1 Million Businesses Breathe a Sigh of Relief as Congress Votes to Reinstate, Extend TRIA; Roundtable Applauds Lawmakers’ Swift, Decisive Action; Obama’s Signature Expected Soon       

Note: Various Capital and Credit policy issues can be found in recent issues of Roundtable Weekly — our weekly policy eNewsletter archive that can searched by key word or phrase.  

(For more information, please email info@rer.org or call 202-639-8400 

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