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Congress passed the Terrorism Risk Insurance Act (TRIA) of 2002, bringing stability to a market turned upside down by the terrorist attacks in New York, Pennsylvania, and Washington D.C. on September 11, 2001. TRIA provides up to $100 billion of reinsurance protection in the event of catastrophic losses from an act of terrorism.

 While the program has been successful in balancing the marketplace and increasing the rate of businesses that buy terrorism coverage, several questions remain. Insurers still don’t know how to accurately model a terrorist attack. Some are concerned about the ability for the private markets to meet their obligations, should the program come to an end. Others wonder how losses would be paid for in the event of an attack. Would the federal government advance the funds or would an insurer pay and then seek reimbursement?

 A recent article in Leader’s Edge Magazine, Uncertain Disaster: Workers Comp Carriers Face a Murky Future if TRIA is not Extended, offers an overview of the situation, including my thoughts as well thoughts from other leading insurance professionals.