It is that time of year again. The newest version of TRIA (Terrorism Risk Insurance Act) is moving through the U.S. legislative system in the hope of being passed and reauthorized again.
TRIA plays a critical role for insurance companies as a U.S. federal backstop that affords a cap on loss for qualifying lines of business impacted by catastrophic acts of terrorism. The insurance community watches the legislation each year, with each respective company ensuring that it is adequately reserving capital, and is otherwise in compliance with the law.
This year, the bill has a provision for a study on relevant cyber exposures, including analyses on whether vulnerabilities are addressed, and capital will be sufficient, under either property and casualty lines of business. Pricing adequacy is also included in the study.
If passed, this will present a unique opportunity for academics, insurance professionals, legislators, and cyber risk modeling firms, to come together and outline what catastrophic economic loss would look like from an act of Cyber Terrorism. The initiative further illustrates the importance of understanding and measuring the impact and nature of catastrophic cyber risk, especially given today's continued reliance on technology and the interconnected nature of computing.
