**GAO-08-919R**                      Published: Jul 11, 2008. Publicly Released: Jul 11, 2008.                  

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## Highlights

The terrorist attacks of September 11, 2001, on the World Trade Center in New York City and the Pentagon in Arlington, Virginia, are estimated to have resulted in insured losses amounting to $32.5 billion. Subsequent to the attacks, insurers largely stopped offering terrorism insurance coverage to commercial property owners, which raised significant concerns about potential negative economic consequences. To help restore confidence and stability in property insurance markets, Congress enacted and the President signed the Terrorism Risk Insurance Act of 2002 (TRIA). Under TRIA, the federal government assumed significant responsibility for the potential insured financial losses associated with future terrorist attacks. While TRIA, which was reauthorized in 2005 and again in 2007, has been credited with stabilizing markets for commercial property insurance, some building owners, Members of Congress, and other industry participants remain concerned that there may still be gaps in coverage. In particular, they have expressed concerns about the ability of policyholders located in large urban areas that are viewed as being at high risk of attack to obtain terrorism insurance coverage. Under the 2007 statute that reauthorized TRIA coverage, GAO was required to conduct a study to determine if specific markets in the United States have any unique constraints on the amount of terrorism insurance available and to evaluate options to enhance coverage. This law required GAO to submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives no later than June 23, 2008. The purpose of this report is to document our compliance with this reporting requirement.

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## Topics

Justice and Law Enforcement

Brokerage industryDeductibles and CoinsuranceFederal propertyFederal regulationsFinancial managementFunds managementInsuranceInsurance companiesInsurance cost controlInsurance lossesInsurance premiumsInsurance regulationLiability (legal)Prices and pricingPropertyProperty damagesProperty lossesReporting requirementsTerrorismCost estimates