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The Terrorist Risk Insurance Act of 2002: The Federal Government's Role in Addressing Losses Caused by Terrorism Open Access

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In response to problems associated with insuring against the risk of foreign terrorist attacks in the United States, Congress passed The Terrorist Risk Insurance Act of 2002 (TRIA) to help solve an availability and affordability crisis in the private marketplace for terrorism risk insurance. TRIA established a temporary three-year federal program that created a risk-sharing mechanism to provide private insurance companies with a tool to manage the allocation of their risk resulting from foreign terrorist attacks. The role of government in helping to provide financial protection from losses not served by private markets is not new, but protecting against terrorism risk is. TRIA and its possible alternatives remain a topic of considerable discussion and debate as our country continues to address the threat of terrorism in the United States. One important element of this analysis is to determine what permanent role, if any, the government should play in providing terrorism risk insurance to address the market failure that occurred after September 11. Another is to explore possible alternatives to the current temporary program.

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