Af­ford­able ter­ror­ism risk in­sur­ance

SP's MAI - - INTERNAL SECURITY -

In the wake of the ter­ror­ist at­tacks of Septem­ber 11, 2001, ter­ror­ism risk in­sur­ance in the United States be­came pro­hib­i­tive. Sub­se­quently, the US Congress passed the Ter­ror­ism Risk In­sur­ance Act, which pro­vides an as­sur­ance of govern­ment sup­port af­ter a cat­a­strophic at­tack, thus mak­ing ter­ror­ism risk in­sur­ance af­ford­able for businesses.

The pro­gramme is to lapse by the end of 2014 and the US Congress is con­sid­er­ing the ap­pro­pri­ate govern­ment role in ter­ror­ism in­sur­ance mar­kets.

A RAND Cor­po­ra­tion study has in­di­cated that in a ter­ror­ist at­tack with losses up to $50 bil­lion, the federal govern­ment would spend more help­ing to cover losses than if it had con­tin­ued to sup­port a na­tional ter­ror­ism risk in­sur­ance pro­gramme.

A RAND re­lease re­ports that in the wake of the ter­ror­ist at­tacks of Septem­ber 11, 2001, ter­ror­ism risk in­sur­ance quickly be­came ei­ther un­avail­able or very ex­pen­sive. The US Congress re­acted by pass­ing the Ter­ror­ism Risk In­sur­ance Act, which pro­vides an as­sur­ance of govern­ment sup­port af­ter a cat­a­strophic at­tack. This has helped keep ter­ror­ism risk in­sur­ance af­ford­able for businesses.

The pro­gramme will ex­pire at the end of this year and the US Congress is con­sid­er­ing the ap­pro­pri­ate govern­ment role in ter­ror­ism.

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