Treasury Department Announces Interim Guidance on Terrorism Risk Insurance Extension Act of 2005
The Treasury Department issued interim guidance to assist the insurance industry in meeting new requirements for the Terrorism Risk Insurance Program. On December 22, 2005, President Bush signed into law the Terrorism Risk Insurance Extension Act of 2005, which reauthorizes the Terrorism Risk Insurance Program for two years, while expanding the private sector role and reducing the federal share of compensation for insured losses under the program.
The interim guidance is designed to assist insurers in complying with changes to the Terrorism Risk Insurance Program made by the Extension Act, many of which come into effect on January 1, 2006. The guidance responds to a number of operational issues that arise under the new law, including: continuing compliance with TRIA’s mandatory availability and policyholder disclosure requirements; determination of the types of property and casualty insurance now included and newly excluded from TRIA; and how the newly enacted program trigger for the federal share of compensation will work.
This interim guidance, along with regulations issued by the Treasury Department from July 11, 2003 through June 14, 2005, can be used by insurers in complying with the new statutory requirements and will remain in effect until superseded by subsequent regulations or guidance. Regulations, interim guidance notices and other information related to the Terrorism Risk Insurance Program can be found at www.treasury.gov/trip.
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