TRIA Reauthorization, in Time for the Super Bowl

Photo by Austin Kirk licensed by Creative Commons

It might not have stopped the Superbowl, but it’s hard to exaggerate the importance of the Terrorism Risk Insurance Act to the holding of big events, building of big roads, running of utilities, construction of shopping centers, and a myriad of other business concerns.

So when TRIA expired Dec. 31, 2014, some speculated that even the Superbowl would have to be called off without a TRIA Reauthorization. They weren’t alone in their concerns of huge impacts if the government abandoned its program that kept business insurance terrorism policies in place.

Rep. Steny H. Hoyer (D-MD), spoke on the floor of the House of Representatives as the new year opened, calling for TRIA reauthorization, quickly and in a bi-partisan manner.

“Reauthorizing the Terrorism Risk Insurance Act will provide much-needed certainty to businesses and insurers, certainty that will help our economy and prevent harm to job creation. I believe Congress has the responsibility to reauthorize the TRIA program, and I encourage all of my colleagues to join me in voting to do so today. This program expired at the end of 2014, and Congress must take action on TRIA without delay.”

Rep. Hoyer spoke to the bill when it went before the House of Representatives the second week of the new year. There it passed and went on to pass the Senate the next day. The TRIA reauthorization was signed into law by President Obama Jan. 12, 2015.

President George W. Bush signed the original Terrorism Risk Insurance Act into law in 2002. It provides government reinsurance back-up which in turn allows primary insurers to offer terrorism coverage in their business policies. And TRIA requires that business insurers offer terrorism coverage for the types of terrorist attacks contained the act.

Before the attacks on Sept. 11, 2001, business insurance policies didn’t exclude terrorism or charge for it.  After 9/11, with its estimated $40 billion insured loss, terrorism was becoming so excluded that soon businesses were unable to obtain it. The impact was a serious threat to real estate, transportation, construction, energy, and utility sectors of the national economy, in other words, vital services to the nation’s security and stability.

In November 2002 the Terrorism Risk Insurance Act was passed, extended and amended in December 2005 and December 2007.  The Act “provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism,” according to the US Treasury Dept.

As the re-authorization passed through Congress and headed toward the president for signing, Rep. Hoyer noted the wide support for the TRIA reauthorization. “All sides deserve, therefore, credit for their efforts to help restore certainty to businesses and protect against a slowdown in job growth that would result from not reauthorizing TRIA.

“Today,” said Mr. Hoyer, “we do the right thing. We do it in a bipartisan fashion. Let’s hope we could continue to do this.”