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Terrorism Risk Insurance Act of 2002: A Primer

By Debra J. Roberts

Abstract

The federal government directly participates in the insurance against terrorist attacks of up to $100 billion per year. It does this under the Terrorism Risk Insurance Act of 2002 (“TRIA”), which was enacted in November 2002, and is in effect until December 31, 2005. This law provides a federal financial backstop for the insurance industry for claims from certain terrorist attacks, and requires that every U. S. property and casualty insurance company offer terrorism insurance to its commercial policyholders. TRIA is currently under review by the U.S. Treasury Department, and new legislation is being proposed in both the House and the Senate to extend TRIA (three bills so far). This primer explains in non-technical terms how TRIA works. It is the first in a series of three papers being published concurrently by COFFI. The other two are “Terrorism Risk Insurance: Conceptual Issues ” and “TRIA: Where Do We Go from Here?”. These two papers discuss the issues within a framework of economic and government policy theories surrounding worldwide terrorism today. Please note that COFFI is not advocating any particular policy options in these papers. I would like to acknowledge the kind assistance of Jeffrey Brown, Doug Elliott, Ellen Seidman and Barbara Stewart. Any mistakes or omissions are, of course, my own. These papers are dedicated to the memory of Vita M. Marino, who died on September 11, 2001 at Two Worl

Year: 2005
OAI identifier: oai:CiteSeerX.psu:10.1.1.173.8197
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