Monday, January 19, 2015 Congress wasted no time approving the Terrorism Risk Reauthorization Act of 2015 (TRIA 2015), making it the first piece of legislation signed by President Obama in 2015. TRIA 2015 provides federal reinsurance backstop for losses resulting from terrorism. It was originally designed to stabilize the market for terrorism insurance after the distress caused to reinsurers by the catastrophic losses after 9/11. TRIA 2015 had overwhelming bipartisan support as a means to protect the nation from the catastrophic effect terrorism has on the economy. Industry supporters viewed TRIA 2015 as necessary to ensure the continued availability of terrorism insurance since many existing policies conditioned terrorism coverage on the extension of the original Terrorism Risk Insurance Act (TRIA).

TRIA 2015 extended TRIA an additional six years, through 2020, with phased increases raising the program’s trigger from $100 million to $200 million in annual aggregate insured losses. TRIA 2015 also raises insurer co-share from 15% to 20%. It requires additional reporting from the insurance industry beginning in 2016, concerning the market for terrorism coverage, including premiums earned, location of exposures, and the market for private reinsurance for terrorism coverage. Further, the Secretary of the Treasury is required to periodically report to Congress on the overall effectiveness of the program.

Confident that TRIA 2015 would pass, the Insurance Services Office has already developed TRIA-compliant policy forms and disclosures for smooth administration in the market. TRIA 2015 also provides for the creation of the National Association of Registered Agents and Brokers (NARAB), which will be comprised of state insurance commissioners and insurance market representatives. NARAB will help insurance agents and brokers operate on a multistate basis by streamlining the licensing process.