The Terrorism Risk Insurance Act (TRIA) now appears set to expire as of December 31, 2014, barring further action from Congress. The Terrorism Risk Insurance Program Reauthorization Act of 2014 would have extended the existing terrorism insurance coverage under TRIA. Although the House of Representatives previously passed a bill reauthorizing TRIA on December 10, 2014, the Senate failed to pass the measure prior to the end of the 113th Congressional legislative session. The original insurance program was enacted in 2002 (and subsequently extended in 2005 and 2007) after the 9/11 attacks as a backstop to the shortage of terrorism insurance in the private market.
Since TRIA’s passage in 2002, it has been a major boon to real estate and other industries that rely heavily on property/liability insurance to insure their assets against damages from terrorist acts. With the failure of Congress to reauthorize the existing legislation prior to end of the current legislative session, it is likely that the affected insurance markets will be in turmoil.
While it is possible that the new 114th Congress under Republican leadership will take up a new reauthorization bill next year, the process may be delayed until existing objections and proposed amendments (which prevented passage in this legislative session) from Senator Tom Coburn, R-OK are addressed.
Accordingly, clients who have property/liability insurance policies that will expire as of December 31, 2014 (or soon thereafter) should immediately contact their insurance professionals in order to discuss potential interim options for coverage pending Congress taking up, and hopefully addressing, the issue again in the coming year.