	Background

Prior to the September 11, 2001, terrorist attacks, insurance covering terrorism losses was normally included in general insurance policies without additional cost to the policyholders. Following the attacks, both primary insurers and reinsurers pulled back from offering terrorism coverage. Because insurance is required for a variety of economic transactions, particularly borrowing for commercial development, it was feared that a lack of insurance against terrorism loss would have a wider economic impact. Congress responded to the disruption in the insurance market by passing the Terrorism Risk Insurance Act of 2002 (TRIA). TRIA created a temporary three-year Terrorism Insurance Program to calm the insurance markets through a government reinsurance backstop sharing in terrorism losses. The idea was to give the private industry time to gather the data and create the structures and capacity necessary for private insurance to cover terrorism risk. TRIA requires insurers to offer terrorism coverage, but does not require commercial policyholders to purchase the coverage. This program was extended in 2005 and 2007. In 2005, the extension legislation focused on reducing the government's exposure from TRIA by increasing the minimum covered event size, increasing the insurer deductible, reducing the government share of losses, and increasing the post-event mandatory recoupment. The TRIA program expired at the end of 2014, as provided for in the 2007 extension. The initial thresholds of the current program are as follows: 
1. Under current law, all mandatory recoupment must be completed by the end of FY2017. Legislation in the 113th Congress

		The Terrorism Risk Insurance Act of 2002 Reauthorization Act of 2013 (H.R. H.R. 1945 has been referred to the House Committee on Financial Services and the House Committee on Homeland Security. Terrorism Risk Insurance Program Reauthorization Act of 2013 (H.R. 4871 . It also specifically supported Senate passage of S. 2244 . The House took up S. 2244 as amended under H.Res. The House and the Senate adjourned on December 16, 2014, without further action on S. 2244 or other legislation to extend TRIA. TRIA Reform Act of 2014 (H.R. 4871)

H.R. The provisions include
a gradual reduction of federal share of losses from 85% to 80%; a gradual increase in program trigger from $100 million to $500 million and removal of the $5 million minimum certification amount; a separate treatment of Nuclear, Biological, Chemical, and Radiological (NBCR) terrorist attacks with lower trigger ($100 million) and higher federal loss sharing (85%); a requirement that certification occur within 90 days of an attack; an increase in the maximum of the mandatory recoupment amount to the total of insurer deductibles under the program (currently approximately $36 billion) and removal of a provision that decreases mandatory recoupment in the case of very large attacks; an increase of the mandatory recoupment from 133% to 150% of the federal share of losses; an allowance for small insurers to opt out of the TRIA requirement to make terrorism coverage available if it would create financial hardship or be financially infeasible; a requirement that additional data on the terrorism insurance market be collected by the Treasury and included in an annual report by the Treasury; and a requirement for a GAO study on the possible effects of instituting insurer premiums for the TRIA coverage and requiring capital reserve funds for terrorism, Congressional Budget Office (CBO) and OMB studies regarding budgeting and costs of federal insurance programs, and a Treasury study on small insurer market competitiveness.
Prior to the September 11, 2001, terrorist attacks, insurance covering terrorism losses was normally included in commercial insurance policies without additional cost to the policyholders. Following the attacks, this ceased to be the case as insurers and reinsurers pulled back from offering terrorism coverage. It was feared that a lack of insurance against terrorism loss would have a wider economic impact, particularly because insurance coverage can be a significant factor in lending decisions.
Congress responded to the disruption in the insurance market by passing the Terrorism Risk Insurance Act of 2002 (TRIA; P.L. 107-297). TRIA created a temporary program, expiring at the end of 2005, to calm the insurance markets through a government reinsurance backstop sharing in terrorism losses. The intent was that this would give the industry time to gather the data and create the structures and capacity necessary for private insurance to cover terrorism risk. TRIA did not require premiums to be paid for the government coverage. Instead, TRIA required private insurers to offer commercial insurance for terrorism risk with the government then recouping some or all federal payments under the act in the years following government coverage of insurer losses.
Under TRIA, terrorism insurance became widely available and largely affordable, and the insurance industry greatly expanded its financial capacity. There has been, however, little apparent success on developing a longer-term private solution, and fears have persisted about wider economic consequences if insurance were not available. Congress passed two extensions to the program, in 2005 (P.L. 109-144) and 2007 (P.L. 110-160). The 2005 extension was primarily focused on reducing the government's upfront financial exposure under the act, whereas the 2007 extension left most of the upfront aspect of the TRIA program unchanged, while accelerating the post-event recoupment provisions. The 2007 legislation also included the only expansion of the TRIA program since initial enactment; it extended the program to cover any acts of terrorism, as opposed to only foreign acts of terrorism.
The current TRIA program expires at the end of 2014. Although insurance industry capacity has increased since 2002, terrorism is still seen by many as essentially uninsurable. Without TRIA, the insurance industry has indicated that terrorism insurance will again become unavailable or unaffordable and fears are again being expressed that lack of terrorism insurance may slow down other sectors of the economy. Several bills (H.R. 508, H.R. 1945, H.R. 2146, S. 2244, and H.R. 4871) were introduced to extend TRIA and change different aspects of the program. The House and the Senate adjourned on December 16, 2014, without passing legislation to extend TRIA.
This report briefly outlines the issues involved with terrorism insurance, summarizes extension legislation in the 113th Congress, and includes a side-by-side of TRIA law and bills that were passed by the Senate (S. 2244), reported by the House Committee on Financial Services (H.R. 4871), and passed by the House (S. 2244 with a substitute amendment). For more a more in-depth treatment of the issues surrounding TRIA, please see CRS Report R42716, Terrorism Risk Insurance: Issue Analysis and Overview of Current Program, by [author name scrubbed].