Of the many cuts included within the Obama administration’s proposed annual budget, terrorism risk insurance remains a hot button issue, as the insurance industry reacts to news that changes to the Terrorism Risk Insurance Act would include lower subsidies and higher deductibles and co-payments. Additionally, the proposal would remove any coverage for attacks by domestic terrorists, according to the Wall Street Journal (www.wallstreetjournal.com).
This is not the first time the administration has called for TRIA changes; last year their proposals were sent to Congress, which never fully addressed the issue. Those proposed changes were to the original TRIA agreement— the Terrorism Risk Insurance Act of 2002. This government backstop would be triggered specifically by a catastrophic terrorist attack. The program was modified and renewed in 2005 and then again for seven years in 2007.
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