Just last night, President Obama signed into law the Terrorism Risk Insurance Program Reauthorization Act of 2015 (H.R. 26). The bill is a six-year extension of the terrorism risk insurance program and also includes The Council’s long-sought NARAB provision to create an interstate agent/broker licensure clearinghouse.
As outlined last week, the “trigger” for an act of terrorism covered under the law will move from $100 million in 2015, to $200 million in 2020 (increasing $20 million each year). Additionally, the bill also increases insurer co-shares from 15 to 20 percent over the next five years. Read an in-depth summation from our legal team at Steptoe & Johnson.
Meanwhile, on Monday, The Council asked the Treasury Department for regulatory guidance clarifying the TRIA coverage gap, which is creating some marketplace issues. The issues stem from two facts:
- Because the old act expired, the new law technically is a brand new law and not an extension of the old law; and
- Many carriers had conditional exclusion riders on the terrorism component of their coverages that said that if the law expires the coverage is terminated.
We will keep you informed as we work with FIO to obtain guidance on these, and other potential issues.