Terrorism Risk Insurance: Overview and Issue Analysis

March 8, 2022 R47042

Terrorism Risk Insurance: Overview and Issue
March 8, 2022
Analysis
Baird Webel
Prior to the September 11, 2001, terrorist attacks, coverage for losses from such attacks was
Specialist in Financial
normally included in general insurance policies without additional cost to the policyholders.
Economics
Following the attacks, such coverage became expensive, if offered at all. Some observers feared

the absence of insurance against terrorism loss would have a wider economic impact, because
insurance is required to consummate a variety of transactions (e.g., real estate). For example, if

real estate deals were not completed due to lack of insurance, this could have ripple effects—
such as job loss—on related industries. Terrorism insurance was largely unavailable for most of 2002, and some have argued
that this adversely affected parts of the economy; others suggest the evidence is inconclusive.
Congress responded to the disruption in the insurance market with the Terrorism Risk Insurance Act of 2002 (TRIA; P.L.
107-297), which created a temporary three-year program. Under TRIA, the government would share the losses on
commercial property and casualty insurance should a foreign terrorist attack occur, with potential recoupment of this loss
sharing after the fact. TRIA requires insurers to make terrorism coverage available to commercial policyholders but does not
require policyholders to purchase the coverage. The program expiration date was extended in 2005 (P.L. 109-144), 2007
(P.L. 110-160), 2015 (P.L. 114-1) and 2019 (P.L. 116-94). Through these reauthorizations, the prospective government share
of losses has been reduced and the recoupment amount increased, although the 2007 reauthorization also expanded the
program to cover losses from acts of domestic terrorism. Following P.L. 116-94, the TRIA program is slated to expire at the
end of 2027.
In general terms, if a terrorist attack occurs under TRIA, the insurance industry covers the entire amount for relatively small
losses. For a medium-sized loss, the government assists insurers initially but is then required to recoup the payments it made
to insurers through a broad levy on insurance policies afterwards—the federal role is to spread the losses over time and over
the entire insurance industry and insurance policyholders. As the size of losses grows larger, the federal government covers
more of the losses without this mandatory recoupment. Ultimately, for the largest losses, the government is not required to
recoup the payments it has made, although discretionary recoupment remains possible. The precise dollar values where losses
cross these small, medium, and large thresholds are uncertain and will depend on how the losses are distributed among
insurers.
The specifics of the current program are as follows: (1) a terrorist act must cause $5 million in insured losses to be certified
for TRIA coverage, (2) the aggregate insured losses from certified acts of terrorism must be $200 million in a year for the
government coverage to begin, and (3) an individual insurer must meet a deductible of 20% of its annual premiums for the
government coverage to begin. Once these thresholds are met, the government covers 80% of insured losses due to terrorism.
If the insured losses are less than an aggregate retention amount ($42.7 billion for 2022), the Secretary of the Treasury is
required to recoup 140% of government outlays through surcharges on TRIA-eligible property and casualty insurance
policies. As insured losses rise above $42.7 billion, the Secretary is required to recoup a progressively reduced amount of the
outlays. At some high insured loss level, which will depend on the exact distribution of losses, the Secretary would no longer
be required to recoup outlays.
Since TRIA’s passage, the private industry’s willingness and ability to cover terrorism risk have increased. In 2019,
approximately 78% of insureds purchased the optional terrorism coverage, paying $3.7 billion in premiums, approximately
1.7 % of the total insurance premiums for TRIA-eligible insurance lines. Over the life of the program, estimated premiums
earned by insurers have totaled $51.9 billion. This relative market calm has been under the umbrella of TRIA coverage and in
a period in which no terrorist attacks have occurred that resulted in government payments under TRIA. It is unclear how the
insurance market would react to the expiration of the federal program, although at least some instability might be expected
were this to occur.

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Introduction
Prior to the September 2001 terrorist attacks on the United States, insurers generally did not
exclude or separately charge for coverage of terrorism risk. The events of September 11, 2001,
changed this as insurers realized the extent of possible terrorism losses. Estimates of insured
losses from the 9/11 attacks are more than $50 billion in current dollars, the largest insured losses
from a nonnatural disaster on record. These losses were concentrated in business interruption
insurance (34% of the losses), property insurance (30%), and liability insurance (23%).1
Although primary insurance companies—those that actually sell and service the insurance
policies bought by consumers—suffered losses from the terrorist attacks, the heaviest insured
losses were absorbed by foreign and domestic reinsurers, the insurers of insurance companies.
Because of the lack of public data on, or modeling of, the scope and nature of the terrorism risk,
reinsurers felt unable to accurately price for such risks and largely withdrew from the market for
terrorism risk insurance in the months following September 11, 2001. Once reinsurers stopped
offering coverage for terrorism risk, primary insurers, suffering equally from a lack of public data
and models, also withdrew, or tried to withdraw, from the market. In most states, state regulators
must approve policy form changes. Most state regulators agreed to insurer requests to exclude
terrorism risks from commercial policies, just as these policies had long excluded war risks.
Terrorism risk insurance was soon unavailable or extremely expensive, and many businesses were
no longer able to purchase insurance that would protect them in future terrorist attacks. In some
cases, such insurance is required to consummate various transactions, particularly in the real
estate, transportation, construction, energy, and utility sectors. Although the evidence is largely
anecdotal, some were concerned that the lack of coverage posed a threat of serious harm—such as
job loss—to these industries, in turn threatening the broader economy.
In November 2002, Congress responded to the fears of economic damage due to the absence of
commercially available coverage for terrorism with passage of the Terrorism Risk Insurance Act
(TRIA).2 TRIA created a three-year Terrorism Insurance Program (usually referred to as the
Terrorism Risk Insurance Program or TRIP)3 to provide a government reinsurance backstop in the
case of terrorist attacks. TRIA was amended and extended in 2005,4 2007,5 2015,6 and 2019.7
Following the 2019 amendments, the TRIP is set to expire at the end of 2027. (A side-by-side of
the original law and the 2005, 2007, and 2015 reauthorization acts is in Table 1. The 2019

1 Insurance Information Institute, Background on: Terrorism Risk and Insurance, at https://www.iii.org/article/
background-on-terrorism-risk-and-insurance.
2 P.L. 107-297; 116 Stat. 2322, codified at 15 U.S.C. §6701 note. For more information, see CRS Report RS21444, The
Terrorism Risk Insurance Act of 2002: A Summary of Provisions, by Baird Webel.
3 The act is entitled the Terrorism Risk Insurance Act; the wording of the statute itself in Section 103(a)(1) establishes a
“Terrorism Insurance Program.” But it is generally known as the Terrorism Risk Insurance Program and is referred to
as such by the Department of the Treasury (see https://home.treasury.gov/policy-issues/financial-markets-financial-
institutions-and-fiscal-service/federal-insurance-office/terrorism-risk-insurance-program).
4 P.L. 109-144; 119 Stat. 2660. For more information, see CRS Report RL33177, Terrorism Risk Insurance Legislation
in 2005: Issue Summary and Side-by-Side, by Baird Webel.
5 P.L. 110-160; 121 Stat 1839. For more information, see CRS Report RL34219, Terrorism Risk Insurance Legislation
in 2007: Issue Summary and Side-by-Side, by Baird Webel.
6 P.L. 114-1; 129 Stat 3. For more information, see CRS Report R43849, Terrorism Risk Insurance Legislation in the
114th Congress: Issue Summary and Side-by-Side Analysis, by Baird Webel.
7 P.L. 116-94; 133 Stat. 3026. This is Division I, Title V, of the Further Consolidated Appropriations Act, 2020. For
more information, see CRS Report R45707, Terrorism Risk Insurance: Overview and Issue Analysis for the 116th
Congress, by Baird Webel.
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Terrorism Risk Insurance: Overview and Issue Analysis

reauthorization extended the program but made no substantive changes to the working of the
TRIP.)
The executive branch has been skeptical about TRIA and the TRIP in the past. Proposals to
expand TRIA were opposed by then-President George W. Bush’s Administration,8 and previous
presidential budgets under then-President Barack Obama called for changes in the program that
would have had the effect of scaling back the TRIP coverage.9 During consideration of the last
reauthorization, the Trump Administration indicated that it was “evaluating reforms … to further
decrease taxpayer exposure”10 but did not strongly advocate for particular provisions in the
ultimate reauthorization bill.
The insurance industry has largely continued to support TRIA,11 as have commercial insurance
consumers in the real estate and other industries that formed a “Coalition to Insure Against
Terrorism.”12 However, not all insurance consumers have consistently supported the renewal of
TRIA. For example, the Consumer Federation of America has questioned the need for the
program in the past.13
Although the United States has suffered attacks deemed “terrorism” since the passage of TRIA,
no acts of terrorism have been certified and no payments have occurred through the TRIP. For
example, although the April 2013 bombing in Boston was termed an “act of terror” by the
President,14 the insured losses in TRIA-eligible insurance from that bombing did not cross the $5
million statutory threshold to be certified under TRIA.
Goals of TRIA and Specifics of the TRIP
The original TRIA legislation’s stated goals were to (1) create a temporary federal program of
shared public and private compensation for insured terrorism losses to allow the private market to
stabilize; and (2) protect consumers by ensuring the availability and affordability of insurance for
terrorism risks while preserving state regulation of insurance. Although Congress has amended
specific aspects of the original act, the operation of the program generally usually follows the
original statute. The changes to the program have largely reduced the government coverage for
terrorism losses, except that the 2007 amendments expanded coverage to domestic terrorism
losses rather than limiting the program to foreign terrorism. The 2019 extension made no
substantive changes except for extending the program.

8 See, for example, the Statement of Administration Policy on H.R. 2761 dated December 11, 2007, at
https://georgewbush-whitehouse.archives.gov/omb/legislative/sap/110-1/hr2761sap-h.pdf.
9 See, for example, Office of Management and Budget (OMB), Analytical Perspectives, Budget of the United States,
FY2011, p. 184, at http://www.gpo.gov/fdsys/pkg/BUDGET-2011-PER/pdf/BUDGET-2011-PER.pdf.
10 OMB, A Budget for a Better America—President’s Budget FY2020, p. 83, at https://www.whitehouse.gov/wp-
content/uploads/2019/03/budget-fy2020.pdf.
11 See, for example, Reuters, “U.S. Insurers Seek Renewal of Federal ‘Backstop’ Against Acts of Terrorism,” March 5,
2019, at https://www.reuters.com/article/us-insurance-terrorism-program-idUSKCN1QM1CI.
12 See http://www.insureagainstterrorism.org.
13 Consumer Federation of America, “Growing Insurer Surplus Calls into Question Industry Need for Congressional
Renewal of Terrorism Insurance,” May 8, 2013, at http://consumerfed.org/news/666.
14 The White House, “Statement by the President,” press release, April 16, 2013, at http://www.whitehouse.gov/the-
press-office/2013/04/16/statement-president.
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Terrorism Risk Insurance: Overview and Issue Analysis

Terrorism Loss Sharing Criteria
To try to meet the first goal, TRIA created a mechanism through which the federal government
could share insured commercial property and casualty losses with the private insurance market.15
The role of federal loss sharing depends on the size of the insured loss. For a relatively small loss,
there is no federal sharing. For a medium-sized loss, the federal role is to spread the loss over
time and over the entire insurance industry. The federal government provides assistance up front
but then recoups the payments it made through a broad levy on insurance policies afterwards. For
a large loss, the federal government is to pay most of the losses, although recoupment is possible
(but not mandatory) in these circumstances as well. The precise dollar values where losses cross
these small, medium, and large thresholds are uncertain and will depend on how the losses are
distributed among insurers. For example, for loss sharing to occur, an attack must meet a certain
aggregate dollar value and each insurer must pay out a certain amount in claims—known as its
deductible. For some large insurers, this individual deductible might be higher than the aggregate
threshold set in statute, meaning that loss sharing might not actually occur until a higher level
than the figure set in statute.
The criteria under the current TRIP are as follows:
1. An individual act of terrorism must be certified by the Secretary of the Treasury
in consultation with the Secretary of Homeland Security and Attorney General;
losses must exceed $5 million in the United States or to U.S. air carriers or sea
vessels for an act of terrorism to be certified.
2. The federal government shares in an insurer’s losses due to a certified act of
terrorism only if “the aggregate industry insured losses resulting from such
certified act of terrorism” exceed $200 million).16
3. The federal program covers only commercial property and casualty insurance,
and it excludes by statute several specific lines of insurance.17
4. Each insurer is responsible for paying a deductible before receiving federal
coverage. An insurer’s deductible is proportionate to its size, equaling 20% of an
insurer’s annual direct earned premiums for the commercial property and
casualty lines of insurance specified in TRIA.
5. Once the $200 million aggregate loss threshold and 20% deductible are met, the
federal government would cover 80% of each insurer’s losses above its
deductible until the amount of losses totals $100 billion.
6. After $100 billion in aggregate losses, there is no federal government coverage
and no requirement that insurers provide coverage.
7. In the years following the federal sharing of insurer losses, the Secretary of the
Treasury is required to establish surcharges on TRIA-eligible property and

15 Commercial insurance is generally insurance purchased by businesses, in contrast to personal lines of insurance,
which is purchased by individuals. This means damage to individual homes and autos, for example, would not be
covered under the TRIA program. Property and casualty insurance generally includes most lines of insurance except for
life insurance and health insurance. The TRIA statutory definition in Section 102(11) specifically excludes “(i) federal
or private crop insurance; (ii) private mortgage insurance or title insurance; (iii) financial guaranty insurance issued by
monoline insurers; (iv) medical malpractice insurance; (v) health or life insurance, including group life insurance; (vi)
federal flood insurance; (vii) reinsurance or retrocessional reinsurance; (vii) commercial automobile insurance; (ix)
burglary and theft insurance; (x) surety insurance; (xi) professional liability insurance; or (xii) farm owners multiple
peril insurance.”
16 15 U.S.C. §6701 note, §103(e)(1)(B).
17 15 U.S.C. §6701 note, §102(11).
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casualty insurance policies to recoup 140% of some or all of the outlays to
insurers under the program. If losses are high, the Secretary has the authority to
assess surcharges but is not required to do so. (See “Recoupment Provisions”
below for more detail.)
Initial Loss Sharing
The initial loss sharing under TRIA can be seen in Figure 1, adapted from a Congressional
Budget Office (CBO) report. The exact amount of the 20% deductible at which TRIA coverage
would begin depends on how the losses are distributed among insurance companies. In the
aggregate, 20% of the direct-earned premiums for all of the property and casualty lines specified
in TRIA totaled approximately $43.8 billion in 2020, according to the latest data collected by the
Department of the Treasury.18 TRIA coverage is likely, however, to begin well under this amount
as the losses from an attack are unlikely to be equally distributed among insurance companies.

18 Department of the Treasury, “IMARA Calculation for Calendar Year 2022 Under the Terrorism Risk Insurance
Program,” 86 Federal Register 73100, December 23, 2021, at https://www.federalregister.gov/documents/2021/12/23/
2021-27795/imara-calculation-for-calendar-year-2022-under-the-terrorism-risk-insurance-program.
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Figure 1. Initial Loss Sharing Under the Current TRIP

Source: Congressional Research Service (CRS), adapted from Congressional Budget Office, Federal Reinsurance
for Terrorism Risks: Issues in Reauthorization, August 1, 2007, p. 12.
Note: Aggregate of all individual insurer deductibles totaled approximately $43.8 billion in 2020, according to
Department of the Treasury data and CRS calculations. Loss sharing is likely to begin well under this amount as
the distribution of terrorism losses is unlikely to be equally spread among insurers. For context, recall that the
insured damages from the 9/11 attacks adjusted to 2020, are more than $50 billion.
Recoupment Provisions
The precise amount TRIA requires the Treasury to recoup after the initial loss sharing is
determined by the interplay among a number of different factors in the law and insurance
marketplace. The general result of the recoupment provisions is that, for attacks that result in
under $42.7 billion in insured losses,19 the Treasury Secretary is required to recoup 140% of the

19 This figure is for the 2022 calendar year. It is defined in Section 103(e)(6)(B) of the TRIA statute as “the amount
equal to the annual average of the sum of insurer deductibles for all insurers participating in the Program for the prior 3
calendar years” to be determined by the Treasury Secretary. Previously the figure was defined in statute as $27.5 billion
and increased over time to $37.5 billion until 2020. For the 2022 determination, see Department of the Treasury,
“IMARA Calculation for Calendar Year 2022 Under the Terrorism Risk Insurance Program,” 86 Federal Register
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government outlays through surcharges on property and casualty insurance policies.20 For events
with insured losses over $42.7 billion, the Secretary has discretionary authority to recoup all the
government outlays and may be required to partially recoup the government outlays depending on
the size of the attacks and the amount of uncompensated losses paid by the insurance industry.
(See the Appendix for more information on exact recoupment calculations.)
If the requirement for recoupment is triggered, TRIA, as amended by P.L. 116-94, requires the
government to recoup all payments prior to the end of FY2029, with an accelerated schedule if
the payments occurred prior to end of 2023. Thus such recoupment would be completed within a
10-year time frame following enactment. For an attack causing significant insured loses, however,
this requirement could result in high surcharges being applied for a relatively short time. The
recoupment surcharges are to be imposed as a percentage of premiums paid on all TRIA-eligible
property and casualty insurance policies, but the Secretary has the authority to adjust the amount
of the premiums taking into consideration differences between rural and urban areas and the
terrorism exposures of different lines of insurance.
Program Administration
The administration of the TRIA program was originally left generally to the Treasury Secretary.
This was changed somewhat in the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010.21 The act created a new Federal Insurance Office (FIO) to be located within the
Department of the Treasury. Among the duties specified for the FIO in the legislation was to
assist the Secretary in the administration of the Terrorism Insurance Program.22
TRIA Consumer Protections
TRIA addresses the second goal—to protect consumers—by requiring insurers that offer TRIA-
covered lines of insurance to make terrorism insurance available prospectively to their
commercial policyholders. This coverage may not differ materially from coverage for other types
of losses. Each terrorism insurance offer must reveal both the premium charged for terrorism
insurance and the possible federal share of compensation. Policyholders are not, however,
required to purchase coverage under TRIA.23 If a policyholder declines to purchase terrorism
coverage, the insurer may exclude terrorism losses. Federal law does not limit what insurers can
charge for terrorism risk insurance, although state regulators typically have the authority under
state law to modify excessive, inadequate, or unfairly discriminatory rates.
Preservation of State Insurance Regulation
TRIA’s goal of preserving state regulation of insurance appears in Section 106(a), which provides
that “Nothing in this title shall affect the jurisdiction or regulatory authority of the insurance
commissioner [of a state].” The Section 106(a) provision has two exceptions, one permanent and

73100, December 23, 2021.
20 The recoupment level as greater than 100% of outlays was first set at 133% in the 2007 reauthorization. This resulted
in a budget-neutral score by CBO. The 140% level was included in the 2014 reauthorization and results in a net
reduction in the budget deficit from the law.
21 P.L. 111-203, 124 Stat. 1376.
22 Section 502 of P.L. 111-203, codified at 31 U.S.C. §313(c)(1)(D).
23 Although the purchase of terrorism coverage is not required under federal law, the interaction of TRIA and state laws
on workers’ compensation insurance results in most businesses being required to purchase terrorism coverage in
workers’ compensation policies.
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one temporary (and expired): (1) the federal statute preempts any state definition of an “act of
terrorism” in favor of the federal definition and (2) the statute briefly preempted state rate and
form approval laws for terrorism insurance from enactment to the end of 2003. In addition to
these exceptions, Section 105 of the law also preempts state laws with respect to insurance policy
exclusions for acts of terrorism.
Coverage for Nonconventional Terrorism Attacks
The TRIA statute does not specifically include or exclude property and casualty insurance
coverage for terrorist attacks according to the particular methods used in the attacks, such as
nuclear, biological, chemical, and radiological (NBCR) and cyberterrorism risks. Such
nonconventional means, however, have the potential to cause losses that may or may not end up
being covered by TRIA and have been a source of particular concern and attention in the past.
Nuclear, Biological, Chemical, and Radiological Terrorism
Coverage
Some observers consider a terrorist attack with some form of NBCR weapon to be the most likely
type of attack causing large scale losses.24 The current TRIA statute does not specifically include
or exclude NBCR events; thus, the TRIP in general would cover insured losses from terrorist
actions due to NCBR as it would for an attack by conventional means. The term insured losses,
however, is a meaningful distinction. Except for workers’ compensation insurance, most
insurance policies that would fall under the TRIA umbrella include exclusions that would likely
limit insurer coverage of an NCBR event, whether it was due to terrorism or to some sort of
accident, although these exclusions have never been legally tested in the United States after a
terrorist event.25 If these exclusions are invoked and do indeed limit the insurer losses due to
NBCR terrorism, they would also limit the TRIA coverage of such losses. Language that would
have specifically extended TRIA coverage to NBCR events was offered in the past26 but was not
included in legislation as enacted. In 2007, the Government Accountability Office (GAO) was
directed to study the issue, and a GAO report was issued in 2008 finding that “insurers generally
remain unwilling to offer NBCR coverage because of uncertainties about the risk and the
potential for catastrophic losses.”27 In the past, legislation (e.g., H.R. 4871 in the 113th Congress)
would have provided for differential treatment of NBCR attacks under TRIA, but such legislation
has not been enacted.

24 There is some variance in the acronym used for such attacks. The U.S. Department of Defense, for example, uses
“CBRN,” rather than NCBR, in its Dictionary of Military and Associated Terms; see p. 34 at https://www.jcs.mil/
Portals/36/Documents/Doctrine/pubs/dictionary.pdf.
25 Insurers might have attempted to exclude the September 11, 2001, losses under existing war risk exclusions, but did
not generally attempt to do so. The Treasury Department has begun collecting data on policies that would exclude
NBCR damages. See FIO, Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace, June
2021, p. 34, at https://home.treasury.gov/system/files/311/2021TRIPSmallInsurerReportJune2021.pdf.
26 See, for example, H.R. 2761 (110th Congress) as passed by the House on September 19, 2007, and H.Rept. 110-318,
available at http://www.gpo.gov/fdsys/pkg/CRPT-110hrpt318/pdf/CRPT-110hrpt318.pdf.
27 GAO, Terrorism Insurance: Status of Coverage Availability for Attacks Involving Nuclear, Biological, Chemical, or
Radiological Weapons, GAO-09-39, December 12, 2008, at http://gao.gov/products/GAO-09-39.
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Terrorism Risk Insurance: Overview and Issue Analysis

Cyberterrorism Coverage
Concern regarding potential damage from cyberterrorism has grown as increasing amounts of
economic activity occur online. The TRIA statute does not specifically address the potential for
cyberterrorism. Thus, there was uncertainty about whether such attacks would be covered in the
same manner as terrorist attacks using conventional means. In 2016, state insurance regulators
introduced a new Cyber Liability line of insurance, raising questions as to whether coverage
under this line would be covered under TRIA, or whether it would not be covered under the law’s
exclusion of “professional liability” insurance. The Department of the Treasury released guidance
in December 2016 clarifying that “stand-alone cyber insurance policies reported under the ‘Cyber
Liability’ line are included in the definition of ‘property and casualty insurance’ under TRIA”28
and codified this guidance in regulation in 2021.29
Despite Treasury’s guidance, cyberterrorism coverage remains a particular concern. The
Department of the Treasury devoted a specific section in its reports on TRIA to cyber coverage,
reporting that the take-up rate for terrorism risk insurance under cyber policies was 56% in 2020,
a figure that has dropped from 66% in 2018.30
P.L. 116-94 included a requirement for GAO to study and report on cyberterrorism, including the
potential costs of cyberattacks; the adequacy of the new, state-defined cyber liability line of
insurance; the private market’s ability to adequately price cyber risks; and the TRIA structure’s
appropriateness for covering cyberterrorism.
Background on Terrorism Insurance
Insurability of Terrorism Risk
Stripped to its most basic elements, insurance is a fairly straightforward operation. An insurer
agrees to assume an indefinite future risk in exchange for a definite current premium. The insurer
pools a large number of risks such that, at any given point in time, the ongoing losses will not be
larger than the current premiums being paid, plus the residual amount of past premiums that the
insurer retains and invests, plus, as a last resort, any borrowing against future profits if this is
possible. For the insurer to operate successfully and avoid failure, it is critical to accurately
estimate the probability of a loss and the severity of that loss so that a sufficient premium can be
charged. Insurers generally depend upon huge databases of past loss information in setting these
rates. Everyday occurrences, such as automobile accidents or natural deaths, can be estimated
with great accuracy. Extraordinary events, such as large hurricanes, are more difficult, but
insurers have many years of weather data, coupled with sophisticated computer models, with
which to make predictions.
Many see terrorism risk as fundamentally different from other risks, and thus it is often perceived
as uninsurable by the private insurance market without government support for the most
catastrophic risk. The argument that catastrophic terrorism risk is uninsurable typically focuses on
lack of public data about both the probability and severity of terrorist acts. The reason for the lack

28 Department of the Treasury, “Guidance Concerning Stand-Alone Cyber Liability Insurance Policies Under the
Terrorism Risk Insurance Program,” 81 Federal Register 95313, December 27, 2016.
29 Department of the Treasury, “Terrorism Risk Insurance Program; Updated Regulations in Light of the Terrorism
Risk Insurance Program Reauthorization Act of 2019, and for Other Purposes,” 86 Federal Register 30537, June 9,
2021.
30 FIO, Study of Small Insurer Competitiveness in the Terrorism Risk Insurance Marketplace, June 2021, p. 33.
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of historical data is generally seen as a good thing—few terrorist attacks are attempted and fewer
have succeeded. Nevertheless, the insurer needs some type of measurable data to determine
which terrorism risks it can take on without putting the company at risk of failure. As a
replacement for large amounts of historical data, insurers turn to various forms of terrorism
models similar to those used to assess future hurricane losses. Even the best model, however, can
only partly replace good data, and terrorism models are still relatively new compared with
hurricane models.
One prominent insurance textbook identifies four ideal elements of an insurable risk: (1) a
sufficiently large number of insureds to make losses reasonably predictable; (2) losses must be
definite and measurable; (3) losses must be fortuitous or accidental; and (4) losses must not be
catastrophic (i.e., it must be unlikely to produce losses to a large percentage of the risks at the
same time).31 Terrorism risk in the United States would appear to fail the first criterion as
terrorism losses have not proved predictable over time. Losses to terrorism, when they occur, are
generally definite and measurable, so terrorism risk could pass under criteria two. Such risk,
however, also likely fails the third criterion due to the malevolent human actors behind terrorist
attacks, whose motives, means, and targets of attack are constantly in flux. Whether it fails the
fourth criterion is largely decided by the underwriting actions of insurers themselves (i.e.,
whether the insurers insure a large number of risks in a single geographic area that would be
affected by a terrorist strike). Unsurprisingly, insurers have generally sought to limit their
exposures in particular geographic locations with a conceptually higher risk for terrorist attacks,
making terrorism insurance more difficult to find in those areas.
International Experience with Terrorism Risk Insurance32
Although the U.S. experience with terrorism is relatively limited, other countries have dealt with
the issue more extensively and have developed their own responses to the challenges presented by
terrorism risk. Spain, which has seen significant terrorist activity by Basque separatist
movements, insures against acts of terrorism via a broader government-owned reinsurer that has
provided coverage for catastrophes since 1954. The United Kingdom (UK), responding to the
Irish Republican Army attacks in the 1980s, created Pool Re, a privately owned mutual insurance
company with government backing, specifically to insure terrorism risk. In the aftermath of the
September 11, 2001, attacks, many foreign countries reassessed their terrorism risks and created a
variety of approaches to deal with the risks. The UK greatly expanded Pool Re, whereas Germany
created a private insurer with government backing to offer terrorism insurance policies.
Germany’s plan, like the United States’ TRIA, was created as a temporary measure. It has been
extended since its inception, most recently until the end of 2022.33 Not all countries, however,
concluded that some sort of government backing for terrorism insurance was necessary. Canada
specifically considered, and rejected, creating a government program following September 11,
2001.34

31 Emmett J. Vaughan and Therese Vaughan, Fundamentals of Risk and Insurance (Hoboken, NJ: John Wiley & Sons,
2003), p. 41.
32 For more information on other countries’ programs addressing terrorism risk, see GAO, Terrorism Risk Insurance:
Comparison of Selected Programs in the United States and Foreign Countries, GAO-16-316, April 12, 2016, at
https://www.gao.gov/products/GAO-16-316.
33 Extremus Versicherungs AG, at https://www.extremus.de/.
34 For a discussion of the approach in Canada, see the following from the Canadian law firm McMillan: Carol Lyon,
“Does Canada Need a Terrorism Risk Insurance Scheme?,” McMillan Insurance Bulletin, December 2015, at
https://mcmillan.ca/Does-Canada-need-a-terrorism-risk-insurance-scheme.
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9

Terrorism Risk Insurance: Overview and Issue Analysis

Previous U.S. Experience with “Uninsurable” Risks
Terrorism risk post-2001 is not the first time the United States has faced a risk perceived as
uninsurable in private markets that Congress chooses to address through government action.
During World War II, for example, Congress created a “war damage” insurance program, and it
expanded a program insuring against aviation war risk following September 11, 2001.35 Since
1968, the National Flood Insurance Program has covered most of the insured flooding losses in
the United States.36
The closest previous analog to the situation with terrorism risk may be the federal riot reinsurance
program created in the late 1960s. Following large-scale riots in American cities in the late 1960s,
insurers generally pulled back from insuring in those markets, either adding policy exclusions to
limit their exposure to damage from riots or ceasing to sell property damage insurance altogether.
In response, Congress created a riot reinsurance program as part of the Housing and Urban
Development Act of 1968.37 The federal riot reinsurance program offered reinsurance contracts
similar to commercial excess reinsurance. The government agreed to cover some percentage of an
insurance company’s losses above a certain deductible in exchange for a premium paid by that
insurance company. Private reinsurers eventually returned to the market, and the federal riot
reinsurance program was terminated in 1985.
The Terrorism Insurance Market
Post-9/11 and Pre-TRIA
The September 2001 terrorist attacks, and the resulting billions of dollars in insured losses,
caused significant upheaval in the insurance market. Even before the attacks, the insurance
market was showing signs of a cyclical “hardening” of the market in which prices typically rise
and availability is somewhat limited. The unexpectedly large losses caused by terrorist acts
exacerbated this trend, especially with respect to the commercial lines of insurance most at risk
for terrorism losses. Post–September 11, insurers and reinsurers started including substantial
surcharges for terrorism risk, or, more commonly, they excluded coverage for terrorist attacks
altogether. Reinsurers could make such rapid adjustments because reinsurance contracts and rates
are generally unregulated. Primary insurance contracts and rates are more closely regulated by the
individual states, and the exclusion of terrorism coverage for the individual insurance purchaser
required regulatory approval at the state level in most cases. States acted fairly quickly, and, by
early 2002, 45 states had approved insurance policy language prepared by the Insurance Services
Office (an insurance consulting firm), excluding terrorism damage in standard commercial
policies.38
The lack of readily available terrorism insurance caused fears of a larger economic impact,
particularly on the real estate market. In most cases, lenders prefer or require that a borrower

35 For more information, see Federal Aviation Administration, “Aviation Insurance Program,” at https://www.faa.gov/
about/office_org/headquarters_offices/ash/ash_programs/aviation_insurance/.
36 For more information, see CRS Report R44593, Introduction to the National Flood Insurance Program (NFIP), by
Diane P. Horn and Baird Webel.
37 P.L. 90-448; 82 Stat. 476. The act also created state Fair Access to Insurance Requirements plans and a Federal
Crime Insurance Program.
38 Jeff Woodward, “The ISO Terrorism Exclusions: Background and Analysis,” IRMI Insights, February 2002, at
http://www.irmi.com/expert/articles/2002/woodward02.aspx.
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10

Terrorism Risk Insurance: Overview and Issue Analysis

maintain insurance coverage on a property. Lack of terrorism insurance coverage could lead to
defaults on existing loans and a downturn in future lending, causing economic ripple effects as
buildings are not built and construction workers remain idle.
The 14-month period after the September 2001 terrorist attacks and before the November 2002
passage of TRIA provides some insight into the effects of a lack of terrorism insurance. Some
examples in September 2002 include the Real Estate Roundtable releasing a survey finding that
“$15.5 billion of real estate projects in 17 states were stalled or cancelled because of a continuing
scarcity of terrorism insurance”39 and Moody’s Investors Service downgrading $4.5 billion in
commercial mortgage-backed securities.40 This picture, however, was not uniform. For example,
in July 2002, the Wall Street Journal reported that “despite concerns over landlords’ ability to get
terrorism insurance, trophy properties were in demand.”41 CBO concluded in 2005 that TRIA
“appears to have had little measurable effect on office construction, employment in the
construction industry, or the volume of commercial construction loans made by large commercial
banks,” but CBO also noted that a variety of economic factors at the time “could be masking
positive macroeconomic effects of TRIA.”42
After TRIA
TRIA’s “make available” provisions addressed the availability problem in the terrorism insurance
market, as insurers were required by law to offer commercial terrorism coverage. However,
significant uncertainty existed as to how businesses would react, because there was no general
requirement to purchase terrorism coverage, and the pricing of terrorism coverage was initially
high.43 Analyzing the terrorism insurance market in the aftermath of TRIA is challenging as well,
since there was no consistent regulatory reporting by insurers until P.L. 114-1 required detailed
reporting, which Treasury began in 2016. Before this time, data on terrorism insurance typically
stemmed from insurance industry surveys or rating bureaus. In examining the terrorism insurance
market since TRIA, it is also important to note that no terrorist attacks have occurred that reached
TRIA thresholds. Thus property and casualty insurance has not made any large-scale payouts for
terrorism damages.
The initial consumer reaction to the terrorism coverage offers was relatively subdued. Marsh, a
large insurance broker, reported that 27% of their clients bought terrorism insurance in 2003. This
take-up rate, however, climbed relatively quickly to 49% in 2004 and 58% in 2005. Marsh
reported that, since 2005, the overall take-up rate has remained near 60%, with Marsh reporting a
rate of 62% in 2017.44 The Treasury reports based on industry data calls have found similar or

39 Real Estate Roundtable, “Terror Insurance Drag on Real Estate Still Climbing,” Roundtable Weekly, September 19,
2003.
40 “Moody’s Downgrades Securities on Lack of Terrorism Insurance,” Wall Street Journal, September 30, 2002, p.
C14.
41 Ray A. Smith, “Office-Building Demand Rises Despite Vacancies,” Wall Street Journal, July 24, 2002, p. B6.
42 Congressional Budget Office, Federal Terrorism Reinsurance: An Update, January 2005, pp. 10-11, at
http://www.cbo.gov/publication/16210.
43 Although there is no requirement in federal law to purchase terrorism coverage, businesses may be required by state
law to purchase the coverage. This is particularly the case in workers’ compensation insurance. Market forces, such as
requirements for commercial loans, may also compel businesses to purchase terrorism coverage.
44 Marsh, 2018 Terrorism Risk Insurance Report, April 2018, p. 1.
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11

Terrorism Risk Insurance: Overview and Issue Analysis

higher take-up rates. For 2019, Treasury found that the take-up rate based on premium volumes
was 63%, whereas based on policy counts, the rate was 78%.45
The price for terrorism insurance has appeared to decline over time, although the level of pricing
reported may not always be comparable between sources. The 2013 report by the President’s
Working Group on Financial Markets, based on survey data by insurance broker Aon, showed a
high of above 7% for the median terrorism premium as a percentage of the total property
premium in 2003, with a generally downward trend, and more recent values around 3%.46 The
trend may be downward, but there has been variability, particularly across industries. For
example, Marsh reported rates in 2009 as high as 24% of the property premium for financial
institutions and as low as 2% in the food and beverage industry.47 In the 2013 Marsh report, this
variability was lower as 2012 rates varied from 7% in the transportation industry and the
hospitality and gaming industry to 1% in the energy and mining industry.48 In 2017, Marsh found
rates varying from 10% in hospitality and gaming to 2% in energy and mining and construction.
Treasury found premiums based on lines of insurance, not on industry category, varying from
68.2% in fire to 1.1% in ocean marine in 2019 for those insurance policies that charged a
premium.49
The total premium amount paid for terrorism coverage in 2019 was approximately $3.68 billion,
or 1.72%, of the $214.3 billion in total premiums for TRIA-eligible lines of insurance.50 From the
passage of TRIA through 2019, Treasury estimates that a total of approximately $43.2 billion was
earned for terrorism coverage by non-related insurers, with another $8.7 billion earned by captive
insurers (i.e., insurers who are owned by the insureds).51
In general, the capacity of insurers to bear terrorism risk has increased over the life of the TRIA
program. The combined policyholder surplus among all U.S. property and casualty insurers was
$886.5 billion at the end of 2020 compared to $408.6 billion (inflation adjusted) at the start of
2002.52 This $886.5 billion has been bolstered by an estimated $42.3 billion in premiums paid for
terrorism coverage over the years without significant claims payments. The policyholder surplus,
however, backs all property and casualty insurance policies in the United States and is subject to
depletion in a wide variety of events. For example, extreme weather losses could particularly
draw capital away from the terrorism insurance market, because events such as hurricanes share
some characteristics—low frequency and the possibility of catastrophic levels of loss—with
terrorism risk.

45 FIO, Report on the Effectiveness of the Terrorism Risk Insurance Program, June 2020, p. 29.
46 President’s Working Group on Financial Markets, The Long-Term Availability and Affordability of Insurance for
Terrorism Risk, April 2014, p. 26.
47 Marsh, The Marsh Report: Terrorism Risk Insurance 2010, p. 14.
48 Marsh, 2013 Terrorism Risk Insurance Report, May 2013, p. 12.
49 FIO, Report on the Effectiveness of the Terrorism Risk Insurance Program, June 2020, p. 20.
50 Calculations by CRS using data from FIO, Report on the Effectiveness of the Terrorism Risk Insurance Program,
June 2020, pp. 77-79.
51 FIO, Report on the Effectiveness of the Terrorism Risk Insurance Program, June 2020, p. 78.
52 AM Best, Best’s Aggregates & Averages, Property-Casualty, 2002 Edition, p. 2; and AM Best, Best’s Aggregates &
Averages, Property-Casualty, 2020 Edition, p. 1. Inflation adjustment from the Bureau of Labor Statistics’ inflation
calculator at https://data.bls.gov/cgi-bin/cpicalc.pl. Actual 2002 figure is $293.5 billion.
Congressional Research Service
12

link to page 17 Terrorism Risk Insurance: Overview and Issue Analysis

Evolution of Terrorism Risk Insurance Laws
Table 1 presents a side-by-side comparison of selected provisions from the original TRIA law,
along with the reauthorizing laws of 2005, 2007, and 2015. The 2019 reauthorization made no
substantive changes to the underlying text. It extended the expiration date to the end of calendar
year 2027 and the date of mandatory recoupment to the end of FY2029.
Congressional Research Service
13

Table 1. Side-by-Side of Previous Terrorism Risk Insurance Laws
(selected provisions)
Original 2002 Law
15 U.S.C. 6701 Note
2005 Reauthorization
2007 Reauthorization
2015 Reauthorization
Provision
(P.L. 107-297)
P.L. 109-144
P.L. 110-160
P.L. 114-1
Title
Terrorism Risk Insurance Act of Terrorism Risk Insurance
Terrorism Risk Insurance
Terrorism Risk Insurance
2002
Extension Act of 2005
Program Reauthorization Act of
Program Reauthorization Act of
2007
2015
Expiration Date
December 31, 2005 (§108(a))
December 31, 2007 (§2)
December 31, 2014 (§3(a))
December 31, 2020 (§101)
“Act of Terrorism”
For an act of terrorism to be
No change.
Removed requirement that a
Removed Secretary of State
Definition
covered under TRIA, it must be
covered act of terrorism be
from certification process and
a violent act committed on
committed on behalf of a
inserted Secretary of Homeland
behalf of a foreign person or
foreign person or interest (thus
Security (§105).
interest as part of an effort to
expanding coverage to domestic
coerce the U.S. civilian
terrorism) (§2).
population or influence U.S.
government policy. It must have
resulted in damage within the
United States or to a U.S.
airliner or mission abroad.
Terrorist act is to be certified
by the Secretary of the
Treasury in concurrence with
the Attorney General and
Secretary of State (§102(1)(A)).
Limitation on Act of
Terrorist act would not be
No change.
No change.
No change.
Terrorism Certification in
covered in the event of a war,
Case of War
except for workers’
compensation insurance
(§102(1)(B)(I)).
Minimum Damage to Be
Terrorist act must cause more
No change.
No change.
No change.
Certified
than $5 million in property and
casualty insurance losses to be
certified (§102(1)(B)(ii)).
CRS-14

Original 2002 Law
15 U.S.C. 6701 Note
2005 Reauthorization
2007 Reauthorization
2015 Reauthorization
Provision
(P.L. 107-297)
P.L. 109-144
P.L. 110-160
P.L. 114-1
Aggregate Industry Loss
No provision.
Created a “program trigger”
No change. Program trigger
Program trigger increased $20
Requirement/Program
that would prevent coverage
remains at $100 million until
million per year until it reaches
Trigger
under the program unless
2014 (§3(c)).
$200 million in 2020 (§102).
“aggregate industry losses
resulting from such certified act
of terrorism” exceed $50
million in 2006 and $100 million
for 2007 (§6).
Insurer Deductible
7% of earned premium for
Raised deductible to 17.5% for
No change. Deductible
No change. Deductible
2003, 10% of earned premium
2006 and 20% for 2007 (§3).
remained at 20% until 2014
remained at 20% for each
for 2004, 15% of earned
(§3(c)).
calendar year of the program
premium for 2005 (§102(7)).
(§106).
Covered Lines of Insurance
Commercial property and
Excluded commercial auto,
No change.
No change.
casualty insurance, including
burglary and theft, professional
excess insurance, workers’
liability (except for directors
compensation, and surety but
and officers liability), and farm
excluding crop insurance,
owners multiple peril from
private mortgage insurance, title coverage (§3).
insurance, financial guaranty
insurance, medical malpractice
insurance, health or life
insurance, flood insurance, or
reinsurance
(§102(12)).
Mandatory Availability
Every insurer must make
No change. Mandatory
No change. Mandatory
No change. Mandatory
available terrorism coverage
availability extended through
availability extended through
availability in effect for each
that does not differ materially
2007 (§2(b)).
2014 (§3(c)).
calendar year of the program
from coverage applicable to
(§106).
losses other than terrorism
(§103(c)).
Insured Loss Shared
Federal share of losses will be
Reduced federal share of losses
No change. Federal share
Reduced federal share one
Compensation
90% for insured losses that
to 85% for 2007 (§4).
remained at 85% through 2014.
percentage point per year until
exceed the applicable insurer
it reaches 80% (§102).
deductible (§103(e)).
CRS-15

Original 2002 Law
15 U.S.C. 6701 Note
2005 Reauthorization
2007 Reauthorization
2015 Reauthorization
Provision
(P.L. 107-297)
P.L. 109-144
P.L. 110-160
P.L. 114-1
Cap on Annual Liability
Federal share of compensation
No change.
Removed language providing
No change.
paid under the program will not
that a future Congress could
exceed $100 billion and insurers
require insurers to cover some
are not liable for any portion of
share of losses above $100
losses that exceed $100 billion
billion if the insurer has met its
unless Congress acts otherwise
individual deductible. Requires
to cover these losses
insurers to clearly disclose this
(§103(e)).
to policy holders
(§4(a) and §4(d)).
Payment Procedures If
After notice by the Secretary of
No change.
Required Secretary of the
No change.
Losses Exceed
the Treasury, Congress
Treasury to publish regulations
$100,000,000,000
determines the procedures for
within 240 days of passage
payments if losses exceed $100
regarding payments if losses
billion
exceed $100 billion (§4(c)).
(§103(e)(3)).
Aggregate Retention
$10 billion for 2002-2003, $12.5 Raised amount to $25 billion for No change. Aggregate retention Raises amount $2 billion per
Amount Maximum
billion for 2004, $15 billion for
2006 and $27.5 billion for 2007
remained at $27.5 billion
year until it reaches $37.5
2005
(§5).
through 2014.
billion. Beginning in 2020, sets
(§103(6)).
the amount equal to annual
average of the sum of insurer
deductibles for previous three
years (§104).
Mandatory Recoupment of
If insurer losses are less than
No change.
Increases total recoupment
Increases total recoupment
Federal Share
the aggregate retention amount,
amount to be collected by the
amount to be collected by the
a mandatory recoupment of the
premium surcharges to 133% of
premium surcharges to 140% of
federal share of the loss will be
the previously defined
the previously defined
imposed. If insurer losses are
mandatory recoupment amount. mandatory recoupment amount.
over the aggregate retention
Full mandatory recoupment
Full mandatory recoupment
amount, such recoupment is at
must occur by September 30,
must occur by September 30,
the discretion of the Secretary
2017 (§4(e)(1)).
2024 (§104).
of the Treasury
(§103(e)(7)).
CRS-16

Original 2002 Law
15 U.S.C. 6701 Note
2005 Reauthorization
2007 Reauthorization
2015 Reauthorization
Provision
(P.L. 107-297)
P.L. 109-144
P.L. 110-160
P.L. 114-1
Recoupment Surcharge
Surcharge is limited to 3% of
No change.
Removed 3% limit for
No change.
property-casualty insurance
mandatory surcharge
premium and may be adjusted
(§4(e)(2)(A)).
by the Secretary to take into
account the economic impact of
the surcharge on urban
commercial centers, the
differential risk factors related
to rural areas and smaller
commercial centers, and the
various exposures to terrorism
risk across lines of insurance
(§103(e)(8)).
Source: CRS using public laws obtained from the Government Publishing Office through http://www.congress.gov.
Notes: Section numbers for the initial TRIA law are as codified in Title 15, Section 6701 note, of the U.S. Code. Section numbers for P.L. 109-144, P.L. 110-160, and P.L.
114-1 are from the legislation as enacted.
CRS-17

link to page 21 Terrorism Risk Insurance: Overview and Issue Analysis

Appendix. Calculation of TRIA Recoupment
Amounts
Table A-1 contains illustrative examples of how the recoupment for the government portion of
terrorism losses under TRIA might be calculated in the aggregate for various sizes of losses. The
total amount of the combined deductibles in the table is simply assumed to be 30% of the insured
losses for illustrative purposes. (The actual deductible amount is, as detailed above, based on the
total amount of premiums collected by each insurer.) Without knowing the actual distribution of
losses due to a terrorist attack, it is impossible to know what the actual total combined deductible
amount would be. Table conclusions with regard to recoupment, however, hold across different
actual deductible amounts.53
The specific provisions of the law and the calculations by the Department of the Treasury define
the “insurance marketplace aggregate retention amount” (Column F) for 2022 as the lesser of
$42.7 billion or the total amount of insured losses (Column A). The “mandatory recoupment
amount” (Column G) is defined as the difference between $42.7 billion and the aggregate insurer
losses that were not compensated for by the program (i.e., the total of the insurers’ deductible
(Column B) and their 19% loss share (Column C)). If the aggregate insured loss is less than $42.7
billion, the law requires recoupment of 140% of the government outlays (Column H). For insured
losses over $42.7 billion, the mandatory recoupment amount decreases, so the Secretary would be
required to recoup less than 140% of the outlays. Depending on the precise deductible amounts,
the uncompensated industry losses (Column D) may eventually rise to be greater than $42.7
billion, which would then mean that the mandatory recoupment provisions would not apply. The
Secretary would still retain discretionary authority to apply recoupment surcharges no matter
what level uncompensated losses reached.
Table A-1. Example of TRIA Recoupment Calculations
($ billions)
Column A
Column B
Column C
Column D
Column E
Column F
Column G
Column H
Insurer 20%
Insurance
Government
Theoretical
Share of
Industry Un-
80% Share of
Aggregate
Mandatory
Required
Theoretical
Combined
Insured
compensated
Insured
Retention
Recoupment
Recoupment
Insured
Insurer
Losses
Losses
Losses
Amount
Amount
Amount
Losses
Deductible
(0.2x(A-B))
(B+C)
(0.80x(A-B))
(A or $42.7)
(F-D)
(Gx1.40)
$0.2
$0.06
$0.03
$0.09
$0.11
$0.2
$0.11
$0.16
$0.5
$0.1
$0.1
$0.2
$0.3
$0.5
$0.3
$0.4
$1.0
$0.3
$0.1
$0.4
$0.6
$1.0
$0.6
$0.8
$5.0
$1.5
$0.7
$2.2
$2.8
$5.0
$2.8
$3.9
$10.0
$3.0
$1.4
$4.4
$5.6
$10.0
$5.6
$7.8
$20.0
$6.0
$2.8
$8.8
$11.2
$20.0
$11.2
$15.7
$30.0
$9.0
$4.2
$13.2
$16.8
$30.0
$16.8
$23.5
$42.7
$12.8
$6.0
$18.8
$23.9
$42.7
$23.9
$33.5

53 For more detailed TRIA scenarios, including different loss distribution assumptions, see CBO, Federal Reinsurance
for Terrorism Risk in 2015 and Beyond: Working Paper 2015-04, June 10, 2015, pp. 11-14, at https://www.cbo.gov/
publication/50171.
Congressional Research Service

1

Terrorism Risk Insurance: Overview and Issue Analysis

$50.0
$15.0
$7.0
$22.0
$28.0
$42.7
$20.7
$29.0
$75.0
$22.5
$10.5
$33.0
$42.0
$42.7
$9.7
$13.6
$100.0
$30.0
$14.0
$44.0
$56.0
$42.7
-$1.3
-$1.8
Source: U.S. Treasury, TRIA statute as amended; calculations by CRS.
Notes: Totals may not sum to 100% due to rounding. For illustrative purposes, the combined insurer deductible
amount is set at 30% of the insured loss size. The actual deductible varies depending on the distribution of
events.

Author Information

Baird Webel

Specialist in Financial Economics

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