The Terrorism Risk Insurance Act (TRIA) was enacted in 2002 on the presumption that insurers would refuse to offer coverage for terrorism damages in the wake of the massive losses attached to the attacks on the World Trade Center. Arguably the most important provision of TRIA is the “make available” section which requires insurers to make terrorism coverage available for purchase in return for a government program that reimburse insurers for terrorism related losses subject to certain criteria being met. The program did not intend to manage losses on a smaller scale, such as the attack in Boston.
Financial institutions tend to pay more for terrorism coverage than other commercial enterprises. Retail banking, since it’s a “main street” enterprise, is particularly at risk. Evolution of TRIA to address smaller scale events might make practical sense but may the costs of such a program will no doubt encounter significant political opposition.
As the TRIA debate continues, ABIA, as a member of the Coalition to Insure Against Terrorism (CIAT), will attend a panel discussion on the terrorism insurance market and the release of the 2013 Marsh market survey. The panel is being held on Capitol Hill on April 30, 2013.
In addition, ABIA has created a TRIA Working Group for our members to learn about the issue and to increase participation in government relations activities to support a long-term TRIA extension, as in H.R. 508. If you would like to learn more about this ABIA working group, please contact ABIA.