TY  - JOUR
AU  - Kunreuther,Howard
AU  - Michel-Kerjan,Erwann
TI  - Policy Watch: Challenges for Terrorism Risk Insurance in the United States
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10870
PY  - 2004
Y2  - November 2004
UR  - http://www.nber.org/papers/w10870
L1  - http://www.nber.org/papers/w10870.pdf
N1  - Author contact info:
Howard Kunreuther
Operations and Information Management
The Wharton School
University of Pennsylvania
3730 Walnut Street, 500 JMHH
Philadelphia, PA 19104-6366
Tel: 215/898-4589
Fax: 215/573-2130
E-Mail: kunreuther@wharton.upenn.edu

Erwann Michel-Kerjan
The Wharton School
University of Pennsylvania
Center for Risk Management
3730 Walnut Street, 556 JMHH
Philadelphia, PA 19104-6340
Tel: 215-573-0515
Fax: 215-573-2130
E-Mail: erwannmk@wharton.upenn.edu
AB  - This paper examines the role that insurance has played in dealing with terrorism before and after September 11, 2001, by focusing on the distinctive challenges associated with terrorism as a catastrophic risk.  The Terrorism Risk Insurance Act of 2002 (TRIA) was passed by the U.S. Congress in November 2002, establishing a national terrorism insurance program that provides up to $100 billion commercial coverage with a specific but temporary risk-sharing arrangement between the federal government and insurers. TRIA's three-year term ends December 31, 2005, so Congress soon  has to determine whether it should be renewed, whether an alternative terrorism insurance program should be substituted for it, or whether insurance coverage is left solely in the hands of the private sector.  As input into this process, the paper examines several alternatives and scenarios, and discusses their potential to create a sustainable terrorism insurance program in the Unites States.
ER  -