With each scheduled expiration and proposed renewal comes a discussion of potential changes to the program. The following changes have been proposed over the years but not enacted.

Large Event Reset

The Risk Insurance Improvement Act of 2008 introduced the concept of a “large event reset.”[1] Under this mechanism, the program would create a separate deductible calculation for large events. The insurer deductible would reduce to 5% of prior year direct earned premium for certified acts of terrorism resulting in more than $1 billion of aggregate industry insured losses for a single event. This large event deductible percentage would increase by 0.5% per year thereafter.

Should the industry sustain $1 billion of aggregate industry insured losses from a certified act of terrorism in a subsequent year, the deductible for large events would reset for the next program year to 5% and resume increasing 0.5% per year thereafter. Treasury would have the discretion to combine multiple acts of terrorism occurring in the same geographic area in any one program year for the purposes of applying the reset.

The Terrorism Risk Insurance Revision Act of 2005 contained a similar concept through which escalating backstop deductible percentages would be reduced by 0.1% for each $1 billion of aggregate industry insured loss that occurred in the prior year (subject to a 5% floor).[2]

Allocated Deductible

The Terrorism Risk Insurance Revision Act of 2005 would have allocated an insurer’s direct earned premium into separate deductible computations.[3] Under this proposal, a separate deductible would be established for each of the major lines of business with a deductible percentage adjusted to reflect the relative exposure under the respective line:

Line of Business Deductible Percentage
Workers compensation16%
Property insurance20%
Liability insurance25%

Sliding Co-Share

The Terrorism Risk Insurance Revision Act of 2005 introduced the concept of a sliding insurer co-share.[4] Under this proposal, the insurer’s co-share would decrease as loss amounts progressed through defined bands:

Loss Band Insurer Co-Share Percentage
Less than $10 billion20%
$10 billion – $20 billion15%
$20 billion – $40 billion10%
More than $40 billion5%

Group Life Insurance

The Terrorism Risk Insurance Program Reauthorization Act of 2007 would have added group life insurance to the lines of business covered by the program.[5] The group life deductible would be based on the amount at risk (i.e., the aggregate amount of death benefits, less the amount of statutory policy reserves, capped at $1 million for any one individual insured under a group life insurance policy) multiplied by 0.0351%. The federal share of compensation under the backstop would be limited to $1 million for any one individual insured under a group life insurance policy. Recoupment surcharges for group life insurance policies would be calculated separately from property and casualty insurance recoupment surcharges.

The Terrorism Risk Insurance Revision Act of 2005 proposed to include group life insurance under a 21.5% deductible based on prior year direct earned premium.[6]

Nuclear, Chemical, Biological and Radiological Terrorism

The TRIA Reform Act of 2014 would have allowed Treasury to certify an act of terrorism as involving “NBCR terrorism.”[7] In the event of an act of terrorism certified as involving NBCR:

  • The insurer-co-share would be set at 85%;
  • The program trigger would be set at $100 million.

The Terrorism Risk Insurance Revision Act of 2005 would reduce the backstop deducible to 7.5% for NBCR terrorism.[8] This proposal contained a special NBCR make available requirement for those policies excluding coverage for losses resulting from NBCR terrorism. Under that requirement, the insurer may offer coverage for NBCR events that differs in its terms, amounts and other limitations for non-NBCR loss events.

Notification of Certification of an Act of Terrorism

The TRIA Reform Act of 2014 would have required Treasury to issue a preliminary notice indicating whether it expects to certify an act of terrorism under the program within 15 days of either:

  • The occurrence of a potential act of terrorism; or
  • The receipt of a petition seeking a preliminary certification decision submitted by an insurer.[9]

Treasury would have 90 days from the occurrence or receipt of the petition to issue a final determination of certification. The failure of Treasury to issue a determination within that time period would be deemed a decision not to certify the occurrence as an act of terrorism.

Certification Threshold

The TRIA Reform Act of 2014 would have increased the certification threshold to $50 million.[10]

Make Available Requirement

The TRIA Reform Act of 2014 would have allowed small insurers to request an exemption from the make available requirement on the basis of financial hardship or impossibility of providing that coverage.[11]

Capital Reserve Fund

The Terrorism Risk Insurance Revision Act of 2005 proposed the TRIA Capital Reserve Fund to act as a voluntary pooling mechanism.[12] Under this mechanism, an insurer could elect to treat some or all of its disclosed terrorism premiums as a TRIA program fee imposed by Treasury. The insurer would retain those funds in a segregated account including all interest, dividends and capital accumulations.

In the event of a certified act of terrorism, the insurer would be able to draw from the account to satisfy its deductible and/or co-share under the backstop (or in the event that the program trigger was not satisfied). To the extent the insurer had entered into a terrorism risk pooling arrangement with other insurers, it could draw on this account to satisfy those obligations.

After insurers had withdrawn appropriate amounts from the account, Treasury would have the right to drawn on those accounts to fund its obligations under the backstop. Treasury would reimburse the accounts through later surcharge collections.

Upon termination of the program, 10% of the funds remaining in the account would be remitted to Treasury with the remainder remitted to the insurer.


[1] S.2621 (110th Congress). Also H.R. 4721 (110th Congress); HR 4299 (110th Congress).
[2] H.R. 4314 (109th Congress).
[3] H.R. 4314 (109th Congress).
[4] H.R. 4314 (109th Congress).
[5] H.R. 4299 (110th Congress).
[6] H.R. 4314 (109th Congress).
[7] H.R. 4871 (113th Congress).
[8] H.R. 4314 (109th Congress).
[9] H.R. 4871 (113th Congress).
[10] H.R. 4871 (113th Congress).
[11] H.R. 4871 (113th Congress).
[12] H.R. 4314 (109th Congress).