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AIA Statement on House Financial Services Committee TRIA Hearing


TRIA Enables a Stable Terrorism Risk Insurance Market

WASHINGTON, D.C., September 19, 2013 - Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), issued the following statement regarding today’s U.S. House Financial Services Committee hearing “The Terrorism Risk Insurance Act of 2002.

TRIA was first authorized in 2002 following the terrorist attacks of September 11, 2001. It was subsequently reauthorized in 2005 and 2007 with broad bipartisan support, and is scheduled to expire on December 31, 2014. Three TRIA reauthorization bills, H.R. 508, H.R. 1945 and H.R. 2146, have been introduced in the U.S. House of Representatives.

Ms. Pusey’s statement follows:

“Terrorism is a unique risk that remains uninsurable without the successful partnership provided by TRIA.  The program provides the necessary stability and certainty to prevent economic disruption while providing for an orderly recovery following an event. It is due to TRIA that terrorism risk insurance is widely available today.      

“TRIA enables insurers to cover this intentional man-made risk that defies predictability.  Unlike natural catastrophes, where the industry can leverage scientific information dating back hundreds of years, only the government has access to the critical information insurers would need to underwrite this unique risk.  There is simply no way for insurers to gauge the frequency, location and means used to carry out terrorist attacks, which are intentional events largely controlled by the terrorists themselves.  Similarly, because terrorism is a dynamic and interdependent risk, the benefits of individual mitigation efforts are diminished.

“While AIA welcomes the debate on whether TRIA is the best long-term solution for managing terrorism exposure, its first 11 years have been highly successful. Rather than ‘crowding out’ private market capacity, TRIA’s public-private partnership, which requires insurers to offer terrorism coverage, has actually enabled commercial insurers to become more comfortable with individually managing terrorism exposures without compromising financial solvency.   

“TRIA protects more than just policyholders, it protects taxpayers too.  The program requires insurers to meet significant deductibles and includes a mandatory recoupment provision for any federal dollars expended on losses up to $27.5 billion.  In addition, insurers are required to absorb 15 cents of every additional dollar of insured losses beyond their individual deductibles up to the program’s $100 billion cap.  Thankfully, there has not been a need to invoke the TRIA program in the years since it was created.  Therefore, the cost to taxpayers has been negligible—administrative staffing only. 

“AIA will be working in the months ahead to achieve broad bipartisan support for reauthorization of this vital program. Our organization and members believe that failure to renew TRIA could lead to significant economic disruption at a time when our country can least afford it.”


The American Insurance Association (AIA) is the trade association for today’s leaders in the property-casualty insurance industry. Our members work each day to protect the American Dream, whether that’s a house, car, business or otherwise. Now more than 150 years old, AIA has an unparalleled record of advocating on state, federal and international issues for insurers and their customers. 

Our membership is comprised of more than 330 companies, collectively writing more than $134 billion in premiums each year.

We have the experience of a veteran organization coupled with the innovative ideas that drive our industry forward. AIA is leading the insurance industry into the second half of the 21st Century… today.

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