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Following the tragic events of 9/11, Congress passed the Terrorism Risk Insurance Act (TRIA) which helped to provide terrorism insurance to US policyholders. It mandated that terrorism insurance coverage be offered while providing a backstop for losses payable through funds by the US treasury. A similar bill is now being discussed in Congress in the wake of COVID-19.

The bill is known as the Pandemic Risk Insurance Act (PRIA) and it closely mirrors TRIA. It requires participating insurers to make available insurance coverage for a “covered public health emergency” which includes “any outbreak of infectious disease or pandemic” on terms that don’t differ from the terms applicable to losses arising from other events. The PRIA would apply to any insurance company licensed in any US state.

That said, there are a number of practical and legislative differences that could impact PRIA’s reach and success. While both sets of risks - terrorism and pandemics - present the prospect of catastrophic damage and immense insurance liabilities, terrorism risks are likely to be greatest in global city centers. While large metropolitan areas are also likely to be most impacted by pandemics, COVID-19 has shown the disease does not respect state lines or stay confined to particular neighborhoods, with nearly every state imposing business closures as a result of COVID-19.


As it stands right now, the PRIA draft would be a voluntary program whereby participating insurers would be required to pay reinsurance premiums to the Treasury for participation. In contrast, TRIA is mandatory. TRIA is also significantly broader and mandates terrorism coverage to be provided along with any commercial property or casualty insurance policy.

Reaction to the components of PRIA has been mixed. While insurance companies are generally optimistic about its prospects, efforts to enforce retroactive coverage by insurance companies of COVID-19 claims have been met with a much more dour tone from the insurance community.

It appears we are still in the early stages of formulating a recovery strategy from COVID-19. The model provided by TRIA provides an existing framework to implement PRIA efficiently. At this juncture, we don’t know exactly where federal and state legislatures will land on the proposals. Stay tuned to for the latest developments on PRIA, including when the bill is officially signed into law.

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