Congress has approved an extension to the Terrorism Risk Insurance Act of 2002, which was set to terminate on December 31, 2005. The legislation, the Terrorism Risk Insurance Extension Act of 2005 ("TRIA"), extends the original program for an additional two years to December 31, 2007, and increases both the industry retention and the size of the event required to trigger the public backstop. President Bush is expected to sign the legislation into law.
Background of TRIA
The insurance marketplace was severely disrupted following the September 11, 2001 terrorist attacks. The threat of terrorism produced uncertainty as insurance underwriters and reinsurers limited or eliminated many forms of coverage for injuries and damage arising from terrorist attacks. This impacted a wide range of businesses that were not able to obtain adequate coverage for terrorism exposures arising from their commercial activities. In response, the federal government enacted TRIA, which was intended to
