Experts Warn of Market Instability if TRIA Is Not Reauthorized by 2027
September 18, 2025 | Financial Services: House Committee, Standing Committees - House & Senate, Congressional Hearings Compilation
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On September 18, 2025, the U.S. House Committee on Financial Services convened to discuss the critical reauthorization of the Terrorism Risk Insurance Act (TRIA) of 2002. This meeting highlighted the ongoing significance of TRIA in maintaining stability in the insurance market and protecting various sectors of the economy from the risks associated with terrorism.
The discussions began with a historical overview of the insurance market prior to the September 11 attacks, illustrating how the concept of terrorism was virtually nonexistent in insurance contracts. Following the attacks, the insurance landscape changed dramatically, with companies adding exclusions to policies and withdrawing from markets, leading to a freeze in economic activity. The establishment of TRIA in 2002 was pivotal, as it restored confidence in the market by making coverage available and affordable, a trend that continues to this day.
Key testimonies during the meeting underscored the potential consequences of failing to reauthorize TRIA by January 1, 2027. Experts warned that without reauthorization, insurance companies would likely limit coverage, increase prices, and potentially withdraw from the market altogether. This scenario could mirror the brief lapse in 2015, which resulted in immediate market instability and reduced availability of terrorism coverage.
The meeting also addressed the implications for educational institutions, which are significant buyers of terrorism risk insurance. With large gatherings of students and faculty, colleges and universities are seen as prime targets for potential attacks. The assurance provided by TRIA allows these institutions to secure necessary insurance, thereby supporting their operations and safeguarding their communities.
Furthermore, the discussion touched on the mandatory recruitment provisions under TRIA, which have never been tested. Experts expressed concerns about the feasibility of recouping costs following a large-scale attack, suggesting that future Congresses may need to revisit these provisions.
In conclusion, the reauthorization of TRIA is not merely a legislative formality; it is essential for ensuring market stability and protecting various sectors from the unpredictable nature of terrorism. As the deadline approaches, the committee's discussions reflect a growing recognition of the importance of this program for the economic health and safety of communities across the nation. The next steps will involve continued advocacy for reauthorization and addressing the concerns raised during the meeting to ensure that the insurance market remains robust and responsive to the needs of all stakeholders.
The discussions began with a historical overview of the insurance market prior to the September 11 attacks, illustrating how the concept of terrorism was virtually nonexistent in insurance contracts. Following the attacks, the insurance landscape changed dramatically, with companies adding exclusions to policies and withdrawing from markets, leading to a freeze in economic activity. The establishment of TRIA in 2002 was pivotal, as it restored confidence in the market by making coverage available and affordable, a trend that continues to this day.
Key testimonies during the meeting underscored the potential consequences of failing to reauthorize TRIA by January 1, 2027. Experts warned that without reauthorization, insurance companies would likely limit coverage, increase prices, and potentially withdraw from the market altogether. This scenario could mirror the brief lapse in 2015, which resulted in immediate market instability and reduced availability of terrorism coverage.
The meeting also addressed the implications for educational institutions, which are significant buyers of terrorism risk insurance. With large gatherings of students and faculty, colleges and universities are seen as prime targets for potential attacks. The assurance provided by TRIA allows these institutions to secure necessary insurance, thereby supporting their operations and safeguarding their communities.
Furthermore, the discussion touched on the mandatory recruitment provisions under TRIA, which have never been tested. Experts expressed concerns about the feasibility of recouping costs following a large-scale attack, suggesting that future Congresses may need to revisit these provisions.
In conclusion, the reauthorization of TRIA is not merely a legislative formality; it is essential for ensuring market stability and protecting various sectors from the unpredictable nature of terrorism. As the deadline approaches, the committee's discussions reflect a growing recognition of the importance of this program for the economic health and safety of communities across the nation. The next steps will involve continued advocacy for reauthorization and addressing the concerns raised during the meeting to ensure that the insurance market remains robust and responsive to the needs of all stakeholders.
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