The US Senate has passed legislation extending the Terrorism Risk Insurance Act (TRIA). Both chambers have now approved seven-year extensions, though differences between their bills still need to be resolved before legislation can reach the president's desk.
TRIA, enacted in 2002 following the September 11 attacks, requires commercial property and casualty insurers to offer terrorism coverage. In exchange, the federal government provides partial reimbursement of insured losses from certified terrorist attacks once statutory thresholds and insurer deductibles have been crossed. Insurers repay that funding with interest over subsequent years. The program expires on December 31, 2027.
Because terrorism coverage is written on a forward-looking basis, the uncertainty created by an unresolved reauthorization reaches brokers before any lapse does. Clients in commercial real estate and construction whose loan agreements require terrorism coverage are the most exposed, and their lenders won't accept a gap, even a temporary one.
Jimi Grande, senior vice president of federal and political affairs at the National Association of Mutual Insurance Companies (NAMIC), said the urgency is structural.
"Insurance coverage is sold on a forward-looking basis, so the potential for disruption in the marketplace will soon get worse," Grande said. "Every major construction project of the past quarter century has depended on TRIA in some way."
The 2014 lapse illustrated what that means. Congress failed to reauthorize before year-end and the program went dark. Terrorism coverage effectively became unavailable across the standard market until Congress acted in January 2015. The current reauthorization cycle has already affected how brokers place coverage for commercial property owners and major venues whose financing requires terrorism insurance, even without a lapse occurring.
Both chambers passed seven-year extensions that would keep the program running through 2034. They are not identical. The House bill passed 373-15 on June 29. It raises the minimum loss threshold for certifying an event as terrorism from $5 million to $10 million starting in 2029 and sets a 90-day window for the Treasury Department to make certification determinations.
The Senate bill is a clean extension with neither change. The threshold is not a technical detail. Certification by Treasury is the trigger for federal backstop payments to insurers, and a higher threshold means smaller-scale attacks falling just under the new bar would be handled entirely by private markets. That does not change what brokers must offer clients under current law, but it will shape conference negotiations and affect underwriting calculations once a final figure is set.
Grande noted that terrorism risk resists the actuarial tools used for natural catastrophe pricing. Unlike hurricanes or earthquakes, terrorism is deliberately adaptive, and data on attempted attacks is restricted for national security reasons. That combination - unpredictable threat, no usable loss data - is the structural reason Congress created a federal backstop in the first place, rather than leaving the private market to price the risk on its own.
The remaining task is reconciling the threshold and certification differences before a unified bill can go to the president. NAMIC began pressing for reauthorization in 2025 and is urging Congress to finalize legislation this year, ahead of the 2027 expiry.
Clients in commercial real estate and construction whose lenders require terrorism coverage will ask whether it is safe to proceed. The honest answer is that both chambers have now passed extensions and the program is on track, but reconciliation is still ahead and no bill has reached the president's desk.
