PROPOSED 

PROJECT PLAN

Advisory Committee on Risk-Sharing 

Mechanisms (ACRSM)

Draft for Discussion- December 15, 2016 1
Proposed Project Plan Overview

• Determine whether Terrorism Risk Insurance Program 

(TRIP) should be restructured

• If the ACRSM is of the view that TRIP should be 

restructured, then what is the alternative?

• If the ACRSM agrees that a restructuring is necessary, 

and agrees on what the restructuring ultimately should be, 

then what is the plan to transition from the current TRIP to 

the restructured alternative?

Draft for Discussion- December 15, 2016 2
Proposed Timeline

• October 31, 2017: Resolve policy questions related to 

whether an alternative to TRIP is required, what the 

alternative should be (if required), and what the transition 

process should be (if required)

• February 28, 2018: Approve report outline

• May 31, 2018: Complete initial draft

• August 31, 2018: Complete second draft

• November 15, 2018: Complete final draft

• December 28, 2018: Publish final report

Draft for Discussion- December 15, 2016 3
General Considerations for All 

Subcommittees

• What are the costs to policyholders and insurers resulting from any restructuring 

changes?

• Does TRIP facilitate appropriate coverage for current terrorism risks?

• Does available data permit analysis of the issues by the ACRSM?

• Do any proposed changes to TRIP permit terrorism coverage to remain available 

and affordable for all policyholders?

• What specific issues are presented by Nuclear, Biological, Chemical, and 

Radiological (NBCR) and Cyber risks?

• Review differences in state laws as they affect TRIP and any potential 

restructuring

• How does the lack of predictive aggregate terrorism models and underwriting 

intelligence affect any potential restructuring of TRIP?

• Compare market appetite for terrorism risk insurance with current capacity

• Communicate with stakeholders to obtain input

• Define appropriate Program Cap, lines of business to be covered, areas of 

exclusion, and other program parameters in connection with any restructuring 

recommendation

Note: This list of considerations is not exhaustive

Draft for Discussion- December 15, 2016 4
Subcommittee Considerations: Primary 

Insurers

• Necessity of terrorism risk insurance and benefits of 

current TRIP

• To what extent are private reinsurance or the capital 

markets are available to support terrorism risk insurance 

written by primary insurers?

• How would a restructured TRIP provide substantially 

similar benefits to primary insurers?

Note: This list of considerations is not exhaustive

Draft for Discussion- December 15, 2016 5
Subcommittee Considerations: 

Reinsurers

• To what extent is private reinsurance capacity available to 

replace TRIP, and what is the long-term viability of such 

support?

• Does the current TRIP depress private reinsurance 

capacity for terrorism risk reinsurance?

• Can private reinsurers provide reinsurance support for the 

Federal exposure under TRIP on an aggregate basis?

Note: This list of considerations is not exhaustive

Draft for Discussion- December 15, 2016 6
Subcommittee Considerations: Capital 

Markets

• To what extent is capital markets capacity available to 

replace TRIP support, and what is the long-term viability 

of such support?

• Can the capital markets provide support for Federal 

exposure under TRIP on an aggregate basis?

Note: This list of considerations is not exhaustive

Draft for Discussion- December 15, 2016 7
Subcommittee Considerations: 

Exploration of Terrorism Risk Approaches 

in Other Areas

• What terrorism risk mechanisms and pooling 

arrangements used in other countries could be adopted 

as part of a restructuring of TRIP?

• Should best practices be imported from similar U.S. 

insurance programs (i.e., National Flood Insurance 

Program, Federal Crop Insurance, California Earthquake 

Authority) as part of a restructuring of TRIP?

Note: This list of considerations is not exhaustive

Draft for Discussion- December 15, 2016 8
Subcommittee Considerations: Consumer 

Interests

• What are the differing needs of urban vs. rural areas in 

connection with terrorism risk insurance?

• How might businesses located in metropolitan areas 

deemed to be at greater risk of terrorist activity be 

affected by any restructuring of TRIP?

• Does TRIP minimize the risk of flight from the insurance 

and reinsurance market in the event of a significant 

terrorist attack? If so, how can this benefit be retained in 

any restructuring of TRIP?

Note: This list of considerations is not exhaustive

Draft for Discussion- December 15, 2016 9
Proposed Subcommittees

• Direct Insurers

• Reinsurance

• Capital markets

• Exploration of terrorism risk approaches in other countries

• Consumer interests

Draft for Discussion- December 15, 2016 10