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Under the Terrorism Risk Insurance Program Reauthorization Act of 2015, the Secretary of the Treasury is required to submit a report regarding the Terrorism Risk Insurance Program to the Committee on Financial Services of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate.

The 2015 Reauthorization Act also requires the Secretary to collect data related to the Program on an annual basis. Since the 2015 Reauthorization Act, the U.S. Department of the Treasury has conducted three data calls – a voluntary call in 2016 seeking calendar year 2015 data, and two mandatory calls in 2017 and 2018 requiring, respectively, the production of 2016 and 2017 data. This report addresses the five statutory considerations identified above, and uses the 2017 and 2018 TRIP data calls to comply with the requirements of the 2015 Reauthorization Act.

Based on analysis of the collected information and identified issues, Treasury has reached the following conclusions:

  • The Program generally has been effective in making terrorism risk insurance available and affordable in the insurance marketplace. Refer to Sections V, VI, and VII.
  • The 2016 and 2017 data collected by Treasury indicates that the market for terrorism risk insurance has been relatively stable over this two-year period, with few observable differences in relevant benchmarks, such as price and take-up rate. Refer to Sections V, VI, and VII.
  • Treasury has not observed any aspects of the Program (either based upon the collected data or operation of the Program generally) that have had the effect of discouraging or impeding insurers from providing P&C insurance in general, or coverage for acts of terrorism specifically. Refer to Sections V, VI, and VII.
  • The Program serves as an important backstop to workers’ compensation insurance, given that under state law, workers’ compensation insurance must cover terrorism risk, is not subject to limits of liability, and cannot exclude causes of loss posing extreme aggregation risks. Refer to Section V and VII.
  • Treasury’s estimate of total earned premiums for terrorism risk insurance from 2003 to 2017 is approximately $37.6 billion (excepting captive insurers), which is between 1 and 2 percent of the total premiums earned in the TRIP-eligible lines of insurance during that period. Refer to Section VIII.

Download the full report.