APCIA backs House action on seven-year TRIA reauthorization

The American Property Casualty Insurance Association (APCIA) has voiced strong support for H.R. 7128, the TRIA Program Reauthorization Act, which proposes a seven-year extension of the federal terrorism insurance backstop. By moving the expiration date from 2027 to 2034, the legislation aims to provide long-term stability for commercial insurers and policyholders who rely on the program for economic protection against catastrophic acts of terrorism. This early legislative action is considered critical for the property insurance sector to prevent market volatility and ensure the continued availability of affordable terrorism coverage.

H.R. 7128, introduced by Representative Mike Flood and cosponsored by Andrew Garbarino, recently advanced through the House Financial Services Committee with a bipartisan 51-2 vote. The bill seeks to preserve the Terrorism Risk Insurance Program (TRIP), a framework established in 2002 after the September 11 attacks resulted in over $40 billion in insured losses and a subsequent withdrawal of private reinsurance. APCIA’s Sam Whitfield noted that the early push for reauthorization is intended to eliminate the uncertainty that would otherwise plague the industry as the current 2027 deadline approaches, ensuring that the vital economic protections companies rely on remain intact.

The importance of the program is reflected in current market data, with total premiums for TRIP-eligible lines reaching $314.1 billion in 2024 and take-up rates for terrorism coverage sitting between 60% and 80%. Under the proposed legislation, the threshold for certifying a terrorist act would increase from $5 million to $10 million starting in 2029, and the Treasury would be required to issue certification determinations within 90 days. These changes are designed to enhance claims transparency for insurers, who currently must meet a deductible equal to 20% of their annual premiums before the federal government covers 80% of losses once the $200 million aggregate industry trigger is met.

The reauthorization effort coincides with a statutory review by the Federal Insurance Office and parallel movement in the Senate via bill S. 4395, introduced by Senator David McCormick. Industry experts highlight that the U.S. approach contrasts sharply with Canada, which lacks a government-backed terrorism pool and remains an outlier among G7 peers like the UK and France. This lack of a backstop in Canada has created a structural gap where commercial policies often use U.S.-influenced language that may not adequately cover modern "malicious attack" scenarios. For U.S. property insurers, the successful passage of H.R. 7128 would secure the vital federal support necessary to manage high-magnitude terrorism risks that the private market may otherwise be unable to absorb.