May 9th, 2018
On Monday, April 30, NAR submitted a comment letter to the Federal Insurance Office (FIO) within the Treasury Department on the effectiveness of the federal Terrorism Risk Insurance Program (TRIP), to assist in the FIO’s 2018 report to Congress. NAR strongly supports TRIP, which is critical to keeping terrorism insurance available and affordable. Terrorism insurance is important to commercial real estate, as lenders often require it as one of the financing terms. The program was most recently renewed in 2015, through December 31, 2020.
TRIP was created in 2002, following the September 11, 2001 terrorist attacks and the subsequent loss of avilable terrorism insurance in the U.S. It created a federal reinsurance risk-sharing program between the federal government and private insurers; the program requires that insurers make available terrorism insurance, and in return the federal government provides a federal backstop for losses above a certain amount ($160 million) from a certified terrorist attack. Since its creation the program has never had to be used, but the “make-available” requirement and the federal backstop have kept coverage both available and affordable around the country.
TRIP is set to expire at the end of 2020, so the next Congress (beginning in 2019) will be tasked with renewing the program. NAR will continue to monitor Treasury activities on TRIP, and will advocate strongly for its reauthorization before its expiration date to keep insurance markets and commercial lending stable.