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RESEARCH AND BRIEFINGS

Passage of Federal Terrorism Insurance Backstop Prevents Market Disruption

 


Organization can take steps to mitigate the exposure, despite the looming expiration of the Terrorism Risk Insurance Program Reauthorization Act.

With TRIPRA now reauthorized, however, pricing and terms and conditions that changed upon expiration are likely to return to pre-expiration levels.

On January 8, 2015, the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) became the first bill passed by the 114th Congress, which as of this writing President Obama is expected to sign shortly.

TRIPRA’s passage capped a months-long renewal process that ran into unexpected difficulty when the US Senate adjourned last year without reauthorizing the federal terrorism insurance backstop, leading to its expiration on December 31, 2014. Had TRIPRA not passed — or had it taken significantly longer to do so — the market dynamics for terrorism insurance would have been disrupted, with many predicting increased pricing and reductions in available capacity.

In our TRIPRA briefing, we cover:

  • The impact of both the short-lived lapse of TRIPRA and its reauthorization on insureds.
  • Coverage determinations insureds need to make in light of the lapse and reauthorization of TRIPRA.
  • How standalone terrorism insurance pricing has been affected.
  • TRIPRA's 2015 provisions.
  • Best practices such as risk quantification and differentiation and business continuity.
  • Steps insureds should take now that TRIPRA has been reauthorized.

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"Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by Jardine Lloyd Thompson Pty Ltd (ABN 69 009 098 864, AFSL 226 827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.

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