Passage of Federal Terrorism Insurance Backstop Prevents Market Disruption

Organization can take steps to mitigate the exposure, despite the looming expiration of the Terrorism Risk Insurance Program Reauthorization Act.

With TRIPRA now reauthorized, however, pricing and terms and conditions that changed upon expiration are likely to return to pre-expiration levels.

On January 8, 2015, the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) became the first bill passed by the 114th Congress, which as of this writing President Obama is expected to sign shortly.

TRIPRA’s passage capped a months-long renewal process that ran into unexpected difficulty when the US Senate adjourned last year without reauthorizing the federal terrorism insurance backstop, leading to its expiration on December 31, 2014. Had TRIPRA not passed — or had it taken significantly longer to do so — the market dynamics for terrorism insurance would have been disrupted, with many predicting increased pricing and reductions in available capacity.

In our TRIPRA briefing, we cover:

• The impact of both the short-lived lapse of TRIPRA and its reauthorization on insureds.
• Coverage determinations insureds need to make in light of the lapse and reauthorization of TRIPRA.
• How standalone terrorism insurance pricing has been affected.
• TRIPRA's 2015 provisions.
• Best practices such as risk quantification and differentiation and business continuity.
• Steps insureds should take now that TRIPRA has been reauthorized.