National security perspectives on terrorism risk insurance in the United States
By: Henry H. Willis, Omar Al-Shahery
Contributors: Al-Shahery, Omar, author; RAND Center for Catastrophic Risk Management and Compensation; Rand Corporation
Series: Policy brief
Publisher: RAND Corporation
Published: 2014
Place of publication: [Santa Monica]
Language: eng
Number of pages: 21
ISBN-13: 9780833085351
Copyright date: 2014
Subjects: Evaluation; Terrorism; History; Terrorism insurance; Risk assessment; Risk (Insurance); Risk management; National security; United States
Description: Congress enacted the Terrorism Risk Insurance Act (TRIA) in 2002, in response to terrorism insurance becoming unavailable or, when offered, extremely costly in the wake of the 9/11 attacks. The law provides a government reinsurance backstop in the case of a terrorist attack by providing mechanisms for avoiding an immediate drawdown of capital for insured losses or possibly covering the most extreme losses. Extended first in 2005 and again in 2007, TRIA is set to expire at the end of 2014, and Congress is again reconsidering the appropriate government role in terrorism insurance markets. This policy brief examines the potential national security implications of allowing TRIA to expire. Examining the history of terrorism in the United States since the passage of TRIA and reviewing counterterrorism studies, the authors find that terrorism remains a real national security threat, but one that is very difficult for insurers to model the risk of. They also find that terrorism risk insurance can contribute to making communities more resilient to terrorism events, so, to the extent that terrorism insurance is more available with TRIA than without it, renewing the legislation would contribute to improved national security.
Notes: Caption title.

"RR-573-CCRMC"--Back cover.

Includes bibliographical references (pages 19-21).