January 2, 2006—With President Bush’s official endorsement, the Terrorism Risk Insurance Act has been saved from the legislative scrap pile.
Bush signed the bill that extends for two years the federal insurance backstop program—slated to lapse on Dec. 31—that helps cover catastrophic losses sustained during a major terrorist attack. Under the new rules, however, property and casualty losses would have to be higher to trigger TRIA provisions; and industry deductibles would increase as well.
The threshold for losses to trigger payouts—at $5 million under the existing program—would be bumped up to $50 million in 2006 and to $100 million the following year; while the amount the insurance industry is required to pay in a year would be increased to $25 billion in 2006 and $27.5 billion in 2007, up from $15 billion currently.
For a summary of the bill, visit the Library of Congress Web site.
