The Federal Insurance Office (FIO) within the US Department of Treasury is seeking feedback from the insurance and reinsurance industry on the effectiveness of the Terrorism Risk Insurance Program (TRIP).
TRIP forms part of the amended Terrorism Risk Insurance Act (TRIA) of 2002, and provides a federal backstop for re/insurers providing coverage for acts of terrorism.
TRIA was reauthorized in December 2019 with an additional requirement that the Treasury’s produces periodic effectiveness reports to analyze the availability and affordability of terrorism risk insurance, including specifically for houses of worship.
The Treasury is required to prepare and submit the reports to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on, among other things, the impact and effectiveness of TRIP.
The latest Effectiveness Report, set to be submitted by June 20th this year, will seek insights from the re/insurance industry regarding the overall success of TRIP, the competitiveness of small insurers, and the availability and affordability of terrorism risk insurance.
The Treasury explained that its request for comment will “provide stakeholders the opportunity to provide qualitative feedback and analysis that may not be otherwise observable through the results of the TRIP Data Calls.”
Specifically, it will question re/insurers on whether any lines of coverage no longer require the support of TRIP, or whether any further lines should be included, as well as the impact of COVID-19 on the availability of coverage, and the link between terror and cyber losses.
