TRIA expiration two weeks away as Senate fails to reauthorize bill
TRIA Set to Expire on December 31, 2014 Senate Fails to Reauthorize
The insurance industry and policyholders of TRIA coverage were shocked by the news that the U.S. Senate failed to reauthorize the Terrorism Risk Insurance Act (“TRIA”) before the 113th Session of Congress adjourned for the year at midnight on December 16th.
What does this mean for buyers of insurance?
Since the Senate failed to either extend or reauthorize TRIA, the backstop it automatically provided to insurance Carriers will cease as of December 31, 2014. However, some Carriers have provided buyers with policies that contained special provisions would continue to provide the coverage in the event that TRIA expired and that continues through the end of the policy period. While it’s unclear how the industry will respond during the coming year, certain Carriers have stated that they will continue to provide coverage, even without a formal provision in effect.
What should insurance buyers do?
Any policyholders that are concerned about a potential lack of Terrorism coverage should contact their WGA Client team.
What types of insurance policies are impacted by this?
TRIA backed coverage is available for virtually all types of insurance, except for Auto.
Are there alternatives to TRIA backed insurance?
Yes, for buyers that want to consider a more comprehensive, and less politically fickle, approach to Terrorism insurance, there is a highly competitive marketplace which provides stand-alone Terrorism coverage which can wrap-around virtually any other type of insurance, e.g. Property, Workers’ Compensation.
What does the future hold for TRIA?
Our best guess? There’s a very good chance that the bill will be reauthorized in January by the 114th Session of Congress, but with less Federal backing, given that both chambers will be in the hands of Republicans. It’s even possible that Congress may convene an emergency session prior to year end. Or perhaps another Executive order?
WGA will continue to closely monitor the events and legislation surrounding TRIA and provide timely updates as more on this issue unfolds.
About the Author
Rich Leavitt is a Principal and the Risk Management Practice Leader at WGA, he is responsible for the firm’s overall strategy for attracting and retaining large clients with complex risks and dynamic needs, as well as the delivery of solutions and services to those organizations.