New York, NY – President Barack Obama signed into law January 12 the extension of the Terrorism Risk Program Reauthorization Act of 2015 which extends the program until December 31, 2020. Terrorism is defined as the violent acts perpetrated by or on behalf of a foreign or domestic person or interest coerce or influence U.S. Policy.
The Terrorism Risk Insurance Act is a United States Federal Law signed by Pres. George W. Bush on November 6, 2002 after the devastating terrorism attack on September 11, 2001 at the World Trade Center resulting to a $40 billion estimated insurance loss. It was the worst fatal attack on record for both property and fatalities and the worst international act of destruction on American soil. The law was set to expire on 2005 but was extended on 2007. The current law expired on December 31, 2014.
Amendments of the said law was also made in the extension which includes program triggers from $100, 000, 000 to $120,000,000 in 2016, $140,000,000 in 2017, $160,000,000 in 2018, $180,000,000 in 2019 until $200,000,000 in 2020 and any calendar year thereafter. The extension of the said program has also been stretched into 6 years. The Treasury Secretary becomes the decision maker on the Certification of a terrorist event (requiring only consultation with the Secretary of Homeland Security and the Attorney General of the USA). In addition, the Certification process will be reviewed (within 9 months of the enactment date of the 2015 Act), resulting in an improvement in the Certification process with the publication of rules and the establishment of a reasonable timeline for Certification.
On the senates’ failure to extend the program before their holiday vacation, taxpayers have hoped to have lesser financial risks but some businesses dreaded to lose or drop their terrorism coverage and the general fear of having slow economic growth when another attack occurs.
So far, there are also a few countries around the world with long-time terrorism risk insurance policies over the years. United Kingdom, Netherlands and Iraq have their own kinds of programs. Countries such as Indonesia (with Jakarta as its main pool of insurance companies), Denmark and India have not imposed a compulsory on their terrorism insurance scheme.
Insurance agencies such as Axis Capital with its group of insurance and reinsurance companies scattered all over the world extends their coverage as well in fear of being tagged as scams.