Under the Terrorism Risk Insurance Act of 2002, as amended (TRIA),1 the Secretary of the Treasury (Secretary) is required to submit a report regarding the Terrorism Risk Insurance Program (TRIP or Program) to the Committee on Financial Services of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate.

Download the full report here.

The required report under TRIA must be submitted no later than June 30, 2020, and must include:

(1) “an analysis of the overall effectiveness of the Program;”
(2) “an evaluation of the availability and affordability of terrorism risk insurance, which shall include an analysis of such availability and affordability specifically for places of worship;”
(3) “an evaluation of any changes or trends in the data collected” by the Secretary;
(4) “an evaluation of whether any aspects of the Program have the effect of discouraging or impeding insurers from providing commercial property casualty insurance coverage or coverage for acts of terrorism;”
(5) “an evaluation of the impact of the Program on workers’ compensation insurers;” and
(6) “an updated estimate of the total amount” of terrorism risk insurance premiums “earned since January 1, 2003.”

TRIA also requires the Secretary to collect data related to the Program on an annual basis.4 Since the 2015 Reauthorization Act, the U.S. Department of the Treasury (Treasury) has conducted five data calls—a voluntary data call in 2016 seeking calendar year 2015 data, and four mandatory data calls in 2017, 2018, 2019, and 2020 requiring, respectively, the production of 2016, 2017, 2018, and 2019 calendar year data. This report (Report) addresses the six statutory considerations identified above, and uses the 2018 through 2020 TRIP data calls (2018-2020 TRIP data calls) to comply with the requirements of TRIA.

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

(1) The Program generally has been effective in achieving the goals identified by TRIA. Refer to Sections V, VI, and VII.
(2) Terrorism risk insurance has generally been available and affordable over the past three years. Information from 2019 reflects that places of worship take up terrorism risk insurance at a higher percentage than do businesses in other industry segments, although for a somewhat higher percentage amount of the total policy premium. Refer to Section V.D.
(3) The market for terrorism risk insurance has been relatively stable over the last three years, with few observable differences in relevant benchmarks, such as price and take-up rate. Refer to Sections V, VI, and VII.
(4) 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 commercial property and casualty (P&C) insurance in general, or coverage for acts of terrorism specifically. Refer to Sections V, VI, and VII.
(5) The Program continues to serve 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.
(6) Treasury’s estimate of total direct earned premiums for terrorism risk insurance from 2003 through 2019 is approximately $43.2 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.

The Report also addresses the recommendations of the Advisory Committee on Risk-Sharing Mechanisms (ACRSM). Download the full Report.