The so-called “backstop” consists of the US government’s promise to share in an insurer’s insured losses subject to three financial parameters:[1]

  • The program trigger;
  • The insurer’s deductible; and
  • The insurer’s co-share.

Figure: Overview of the backstop

8.1 – Program Trigger

8.2 – Insurer Deductible

8.3 – Insurer Co-Share

8.4 – Per Act and Per Calendar Year Bases

8.5 – Affiliation

8.6 – Special Note on Residual Market Mechanisms

8.7 – Policies, Processes and Controls


[1] Terrorism Risk Insurance Act, Sec. 103(e).