House Passes TRIA Renewal

Federal backstops for terrorism insurance would be extended for another seven years under legislation the House passed Tuesday, December 25, and sent to President Bush.^[1] The administration, however, contends that the program is a temporary response to the 2001 terrorist attacks and should be phased out in favor of a private market for terrorism insurance.^[2]

"Today‘s vote is a major accomplishment and will help extend the market stability and certainty that TRIA has provided since its enactment in 2002…This action is critical to businesses throughout the nation that rely on insurance to protect them from the threat of terrorism," said former Montana Gov. Marc Racicot, president of the American Insurance Association.^[3]

The House in September approved a more ambitious plan that extended the program for 15 years, lowered the threshold for triggering federal aid to $50 million, from the current $100 million and specified that nuclear, biological, chemical and radiological attacks would be covered.^[4] It also added group life insurance to covered items and ensured that areas hit by terrorist attacks could get insurance in the future.^[5]

The post-9/11 Terrorism Risk Insurance Act (TRIA) contains a completely different definition of terrorism than we are used to seeing in statutes like 18 U.S.C. § 2332, which essentially criminalizes all homicide, conspiracy to commit homicide, and other physical violence with the intent to coerce public policy.^[6]Conversely the TRIA defines the term “act of terrorism” as: any act certified by the Secretary of Treasury, in concurrence with the Secretary of State and Attorney General, to be an act that is dangerous to human life, property, or infrastructure and to have resulted in damage within the U.S. (or outside the U.S. in the case of a U.S.-flagged vessel), or on the premises of a U.S. mission.^[7]

In addition, the act of terrorism must have been committed by individual(s) acting on behalf of a foreign person or foreign interest as part of an effort to coerce the U.S. population or government. Losses from the act must exceed $50 million in 2006 – up from the original $5 million trigger. In 2007, that trigger will rise to $100 million.^[8]

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^[1] Jim Abrams, Congress renews terror insurance act, Associated Press Newswire, December 18, 2007, Associated Press Newswire, July 19, 2007, LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] 18 U.S.C. § 2332(2007).
^[7] Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, 101(a)-(b), 116 Stat. 2322, 2322-23 (2002).
^[8] Id.