Treasury Changes Terrorism Risk Insurance Program
The Treasury Department reminded all participants and observers of the Terrorism Risk Insurance Program that there will be two important changes in the program’s administration in 2004.
As mandated by Congress, beginning on January 1, 2004 and throughout the remainder of 2004, an insurer’s deductible will increase from 7 percent to 10 percent of the insurer’s direct earned premium over the previous calendar year. Second, the “mandatory availability” provisions of the Act will require insurers to continue to make available coverage for certified acts of terrorism for the full annual policy periods of all commercial property and casualty insurance policies that are issued or renewed in 2004. The “make available” requirement under the Act applies to December 31, 2004 while coverage issued as a result of the requirement will extend for the normal annual policy period beyond 2004. As required by the Act, the Treasury Department will be evaluating whether the “mandatory availability” provisions should be extended for policies that are issued or renewed in 2005.
The final and proposed regulation and other information related to the Terrorism Risk Insurance Program can be found at http://www.treasury.gov/trip/.