Terrorism Risk Insurance Program

2019 Reauthorization Act

Advisory Committee on Risk-Sharing Mechanisms

February 5, 2020

Federal Insurance Office

February 2020

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Office of Domestic Finance

TRIP Overview: Federal Share 2020-2027

Conditions for Treasury Payment 

 Certification of act of terrorism (which must result 

in at least $5M in insured losses)

 Program Trigger: No Treasury payment unless 

aggregate insured losses, of all insurers, during a 

calendar year exceed $200M 

 Insurer Deductible: 20% of direct earned 

premiums (DEP) for TRIP-eligible lines of prior 

year

Limit on Treasury’s Liability

 Co-Pay: Treasury pays 80% of losses above 

deductible 

 Program Cap: Treasury and insurers have no 

obligations after combined losses reach $100B

Non-Certified*

No Federal Payment*

Insurer Deductible: 20% of DEP 

Insurer

Co-Pay 

20%

Federal Share 

80%

$200M

Start of 

Federal Share

$5M

$100B

*These amounts will be included in insurer 

deductible and federal payment calculations once 

the Program Trigger is reached

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Office of Domestic Finance

TRIP Overview: Recoupment 

Recoupment 

 Recoupment is the statutory process by which 

Treasury recovers some or all of the payments it 

expends after a certified act of terrorism. 

 Treasury recoups expenditures by imposing a 

charge on all commercial policyholders in the 

United States, which is collected and remitted to 

Treasury by insurers.

 Treasury is required by statute to recoup 

expended funds up to the Insurance Marketplace 

Aggregate Retention Amount (IMARA). The 

IMARA is calculated based upon the average 

aggregate insurer deductibles over the prior three 

years. The 2020 IMARA is $40.9 billion.

 Above the IMARA, it is within the Secretary’s 

discretion whether to recoup Treasury payments.

Recoupment Mechanics

 TRIP requires mandatory recoupment below the 

IMARA to be made at a 140% rate

 Discretionary recoupment, if made, is at a 100% 

rate and subject to certain percentage limitations 

on a yearly basis 

No Federal Payment

Insurer Deductible: 20% of DEP 

Mandatory Recoupment

(Federal Share x 140%)

Insurer

Co-Pay 

20%

Start of 

Federal Share

IMARA

$100B

Discretionary Recoupment

(Federal Share x 100%)

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Office of Domestic Finance

 GAO has been directed by the 2019 Reauthorization Act to make a 

report to Congress within 180 days of enactment which addresses 

the following issues:

• the overall vulnerabilities and potential costs of cyber attacks to the United States 

public and private infrastructure that could result in physical or digital damage;

• whether state-defined cyber liability under a property and casualty line of 

insurance is adequate coverage for an act of cyber terrorism;

• whether such risks can be adequately priced by the private market; and

• whether the current risk-share system under TRIA is appropriate for a cyber 

terrorism event. 

 In addition, GAO is also requested to provide recommendations on 

how Congress could amend TRIA “to meet the next generation of 

cyber threats.” 

GAO Cyber Study

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Office of Domestic Finance

 The 2019 Reauthorization Act specifically requires Treasury’s 

periodic Program Effectiveness Reports to address “the availability 

and affordability of terrorism risk insurance, which shall include an 

analysis of such availability and affordability specifically for places of 

worship.”

 Treasury has previously analyzed the availability and affordability of 

terrorism risk insurance generally in its Program Effectiveness 

Reports, but has not to date collected information that would permit 

specific assessment relating to places of worship.

Terrorism Risk Insurance and Places of Worship

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