TRIA Reauthorization Would Push More Terrorism Risk Onto Insurers, A.M. Best Says

A House bill extending the Terrorism Risk Insurance Program through 2034 would raise the loss trigger to $10 million and impose a 90-day certification deadline, according to A.M. Best.
By: | October 21, 2026
Sunset Sky over US Capitol Building

The Terrorism Risk Insurance Program took its first step toward reauthorization in June 2026, when the TRIA Program Reauthorization Act of 2026 was introduced to extend the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) of 2027 through December 31, 2034, according to a recent analysis by A.M. Best.

The program had been set to expire Dec. 31, 2027. A.M. Best said the current proposal put forward by the House of Representatives, H.R. 7128, contains two changes that could affect insurers with terrorism exposure: a higher loss threshold required to trigger the federal backstop and a new deadline for certifying an attack as an act of terrorism.

The Senate in late September passed its own version of reauthorization legislation, S. 4395, as a clean seven-year extension without the House changes included. Lawmakers must reconcile the two reauthorization bills before sending a unified measure to President Trump to be signed into law.

Higher Trigger Shifts More Losses to Insurers

Under the House bill, the damage threshold needed to trigger the program for an individual incident would rise to $10 million from $5 million, beginning in 2029, according to A.M. Best. The ratings agency said the change is material for smaller events, though the new threshold “remains low relative to modeled terrorism scenarios affecting dense commercial property concentrations.”

A.M. Best said the higher individual trigger could materially increase the terrorism-related losses insurers must absorb before federal cost-sharing becomes available, placing greater responsibility on insurers and potentially influencing underwriting, pricing and capital allocation decisions.

The financial impact would not be uniform across the industry, A.M. Best said. National insurers with diversified exposures and substantial capital resources may be better positioned to retain the additional risk, while smaller and regional insurers may be disproportionately affected because they typically have fewer opportunities to diversify terrorism exposure and limited access to alternative risk transfer solutions, according to the ratings agency.

New 90-Day Certification Window Cuts Both Ways

The second change in the House proposal would require the Treasury secretary to certify an act of terrorism within 90 days of publishing an initial notice that an event is under review for certification, A.M. Best said. The ratings agency said this requirement would give insurers greater certainty by establishing a defined timeline for determining whether the federal backstop applies following a potential terrorist event, which could reduce post-event ambiguity over coverage, exclusions, federal sharing and deductibles.

However, A.M. Best cautioned that the accelerated timeline carries a potential downside: an increased risk of premature or inaccurate determinations. Investigations into potential terrorism events involving cyber-attacks, foreign actors or coordinated attacks could take longer to resolve than the statutory 90-day deadline allows, according to the ratings agency.

A.M. Best Tracking Insurer Exposure and Mitigation Plans

A.M. Best said it began compiling a list of rated insurers with terrorism exposure in the first quarter of 2026. Insurers identified as having material terrorism exposure combined with significant reliance on TRIPRA will be asked to disclose their mitigation plans in response to the proposed changes, according to the ratings agency.

A.M. Best said it considers TRIPRA an effective federal backstop against terrorism-related losses but not a substitute for strong risk management practices. The ratings agency said it will continue monitoring insurers’ terrorism exposure data and will take rating actions as necessary.

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The R&I Editorial Team can be reached at [email protected].

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