Terrorism risk insurance would be less available were the Terrorism Risk Insurance Act not renewed, the President’s Working Group on Financial Markets said in a report Thursday. “The private market does not have the capacity to provide reinsurance for terrorism risk to the extent currently provided by TRIA,” the report found.
TRIA has helped to keep terrorism insurance available and affordable and has improved take-up rates, the report said. But uncertainty about whether TRIA will be renewed when it expires at the end of 2014 is causing tightening in the insurance market.
The ABIA has strongly advocated for TRIA’s prompt renewal. In testimony last year, ABIA noted that the threat of TRIA’s lapse has already caused significant market disruption, with some new commercial loans and refinancings that require property insurance policies being issued only on a short-term basis or in some cases not at all.
Read the report from the President’s Working Group on Financial Markets.