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AIA Statement on Senate Banking Committee TRIA Hearing


TRIA Enables a Stable Terrorism Risk Insurance Market  

WASHINGTON, D.C., September 25, 2013 - Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), issued the following statement regarding today’s U.S. Senate Banking Committee hearing “Reauthorizing TRIA: The State of the Terrorism Risk Insurance Market.

The Terrorism Risk Insurance Act (TRIA) was first authorized in 2002 following the terrorist attack of September 11, 2001. It was subsequently reauthorized in 2005 and 2007 with broad bipartisan support, and is scheduled to sunset on December 31, 2014.

Ms. Pusey’s statement follows:

“Terrorism risk insurance is widely available today because of the successful approach provided by TRIA.  It protects our nation’s economy from potential disruption while providing for an orderly recovery following an event.  TRIA deserves reauthorization.

 “TRIA enables insurers to cover what would otherwise remain an uninsurable risk.  The risk of terrorism is fundamentally different from other exposures because it is an intentional man-made risk where terrorists largely control the means, timing, and location of any attack.  Terrorists will follow the path of least resistance, undermining efforts to protect against the risk.  And, unlike natural catastrophes or other perils, insurers simply cannot model terrorism risk as only the government, and rightly so, has access to the critical national security intelligence insurers would need to underwrite this unique risk.   

“TRIA’s public-private ‘shared loss’ partnership, which requires insurers to offer terrorism coverage, has made it possible for commercial insurers to individually manage terrorism exposures without compromising financial solvency.  Due to the uninsurable nature of this risk, there remains little private market reinsurance capacity to backstop insurers.  TRIA provides a high-level federal government backstop that reduces some of the market instability and ensures that insurance companies will absorb all non-catastrophic terrorism losses. 

“TRIA protects more than just policyholders, it protects taxpayers too.  In its 11 years of existence, TRIA hasn’t paid out one penny.  It requires insurers to meet significant deductibles and retentions, and includes a mandatory recoupment mechanism for any federal dollars expended on the first $27.5 billion in losses.  Today, our nation would have to suffer an attack larger than the September 11 tragedy before taxpayers would have to pay anything under TRIA.  

 “AIA will be working in the months ahead to achieve broad bipartisan support for reauthorization of this vital partnership. 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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