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AM Best warns of higher TRIA trigger under proposed backstop changes
AM Best said the proposal would extend the current terrorism risk program through Dec. 31, 2034, and could alter insurers’ underwriting, pricing, and capital allocation.
Proposed changes to the US federal terrorism insurance backstop could raise the program trigger to $10 million from $5 million and increase how much terrorism-related losses insurers must absorb, according to new commentary from AM Best, covered by Reinsurance News.
Reinsurance News reports the proposed Terrorism Risk Insurance Program Reauthorization Act of 2026 would extend the current Terrorism Risk Insurance Program, which is set to expire at the end of 2027, through Dec. 31, 2034.
AM Best said in its commentary that the higher House trigger would place greater responsibility on insurers and could affect underwriting, pricing, and capital allocation, adding that the $10 million threshold remains low relative to modeled terrorism scenarios involving dense commercial property concentrations.
The article also notes that while both chambers of Congress have reportedly approved legislation to extend the program, differences between the House and Senate bills still must be resolved, and the House bill would require the Treasury secretary to certify an act of terrorism within 90 days of publishing an initial notice.