Home > Property & Casualty > TRIPRA passes Senate – six-year extension relief for terrorism insurance buyers

TRIPRA passes Senate – six-year extension relief for terrorism insurance buyers

court2The U.S. Senate voted 93-4 yesterday in favor to pass the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA) following passage of the same version of the bill (H.R. 26) in the House on Wednesday. Thursday’s vote ended weeks of anxiety for buyers of terrorism insurance caused by the Senate’s failure to reauthorize the bill on December 31st, 2014. Once signed by President Barack Obama, the law extends the federal terrorism reinsurance program for six years.

The bill includes several changes with respect to the reinsurance mechanics of the Act, none of which are expected to impact insurance buyers:

    • Program Trigger phased in increase starting on January 1, 2016 by $20 million per year:
      • 2015 – $100 million
      • 2016 – $120 million
      • 2017 – $140 million
      • 2018 – $160 million
      • 2019 – $180 million
      • 2020 – $200 million
    • Beginning January 1, 2016, the mandatory recoupment rises from $27.5 billion to $37.5 billion over a five year period, increasing by $2 billion each year
    • For all events, the bill raises the private industry recoupment total from the current 133% of covered losses to 140% of covered losses
    • Beginning in 2016, the bill requires the Treasury to collect data from insurers on terrorism insurance, including premiums and take-up rates
    • The bill also encourages an advisory committee to encourage development of private market risk spreading mechanisms.

Despite the short time gap following the current bill’s expiration, Congress has made clear that TRIA’s reauthorization applies its coverage retroactively and continuously without a lapse so that there will be no program gap.

While TRIPRA helps prevent any long-term price increases or a lack of adequate capacity in the terrorism insurance markets, the extension is unlikely to have any other major implications for buyers of commercial terrorism insurance.

WGA will continue to closely monitor the events and legislation surrounding TRIPRA and provide timely updates on the issue.

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. 

617.646.0283 | RLeavitt@wgains.com | Connect with Rich on LinkedIn

  1. Rich Leavitt
    January 13, 2015 at 10:26 am

    TRIA Extension Signed into Law, read more here:

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