An Overview of the Terrorism Risk Insurance Act of 2002
- Topics:
- Terrorism Insurance
- Source:
- Thomson
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Overview: On November 26, 2002, President Bush signed into law the Terrorism Risk Insurance Act of 2002 (the "Act"). The Act, which takes immediate effect, serves as a financial backstop, enabling commercial insurers to provide affordable terrorism coverage to policyholders. The Act renders all existing policy terrorism exclusions null and void, and requires all property and casualty insurers to offer policyholders terrorism insurance for two years (which, at the Treasury Secretary's discretion, may be extended an additional year). The Act does not provide coverage pricing guidelines. States, however, can invalidate any rates determined to be excessive, inadequate or unfairly discriminatory. The Act establishes a program within the Treasury Department, under which the Federal government shares the risk of loss from future foreign terrorist attacks. By providing a temporary federal backstop, the government seeks to encourage insurers to offer affordable coverage for the unprecedented financial risks posed by foreign acts of terrorism.
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Format: HTML | Date: Jan 2003 | Pages: 1
