The two chambers of Congress have now each passed their own version of a long-term extension of the federal terrorism insurance backstop, leaving negotiators with one remaining job: agreeing on a single text before the program expires at the end of 2027. The House acted first, passing its bill by a wide bipartisan margin in late June 2026. The Senate followed in late September with its own version, approved without objection. Both bills would keep the Terrorism Risk Insurance Program, known as TRIA, running through 2034. They differ on one substantive point, and that difference is now the whole ballgame.
The program at the centre of the debate was created after the attacks of September 11, 2001, when many commercial insurers stopped offering terrorism coverage altogether, or priced it so high that it was effectively unavailable. Congress responded with the Terrorism Risk Insurance Act of 2002, which requires insurers to offer terrorism coverage on terms similar to other commercial coverage, and which provides a federal backstop for very large losses. In exchange for that backstop, insurers must make terrorism coverage available, and the government can recoup federal payments through a surcharge on commercial policyholders. The program has never actually paid out, because no certified act of terrorism has exceeded the thresholds that trigger federal sharing, but supporters argue that its existence is what keeps the market functioning: without it, insurers say, they would not write the policies that developers, lenders, and large employers need.
That arrangement has been renewed several times since it was first enacted in late 2002, most recently for seven years in 2019, expiring at the end of 2027. Each renewal has involved the same argument in different forms: whether the federal backstop is still necessary, whether the private market could stand on its own, and whether the terms should be tightened to protect taxpayers or loosened to give markets more certainty. The 2026 debate has followed that pattern, but with a twist. The chambers agree on the length of the extension, and they agree that the programme should continue. They disagree on two technical changes that the House added and the Senate omitted, and those changes are the subject of the reconciliation that must now follow.
What the House passed, and why it changed the rules
The House bill is H.R. 7128, the TRIA Program Reauthorization Act of 2026, sponsored by Representative French Hill of Arkansas, the chairman of the House Financial Services Committee, and Representative Maxine Waters of California, the committee’s ranking member. It passed the House on 8 September 2026 by 373 votes to 15, a margin that required support from both parties under the suspension procedure used to bring it to the floor. The bill’s central provision is straightforward: it reauthorises the programme for seven years, through 31 December 2034, on the same basic terms as the current programme, with two changes that have become the focus of the debate with the Senate.
House Financial Services Committee Chairman French Hill of Arkansas described the programme’s purpose in terms that supporters have used for more than two decades. He said TRIA provides certainty to the insurance market and to businesses that rely on terrorism coverage to finance construction, operate large venues, and maintain commercial property, and that a long-term extension would prevent the kind of market disruption that followed the 2001 attacks. Hill’s framing is important because it presents the programme not as a new intervention but as the continuation of a market-stabilising arrangement that has never been called upon to pay a claim, and that, on that view, has cost taxpayers virtually nothing in practice while enabling a very large volume of private investment.
The House bill does more than simply extend the calendar. It lengthens the authorisation by seven years, but it also raises the threshold for certifying an act of terrorism from 5 million dollars in insured losses to 10 million dollars, effective in 2029. That change would mean that smaller attacks, even if they caused significant local damage, would not trigger the federal backstop unless their insured losses reached the higher figure. The bill also adds a provision requiring the Treasury Secretary to make a certification determination within 90 days of receiving a request, a timetable that insurers have sought for years because, in their account, uncertainty about whether an event will be certified makes it harder to price policies and settle claims promptly. Both changes are presented by House supporters as modernisations that reflect the growth of the economy and the insurance market since the thresholds were last set.
Supporters present the higher threshold as a taxpayer-protection measure. Smaller events, on this argument, should be handled by the private market alone, with federal support reserved for the kind of large, catastrophic event that the programme was created for. Critics, including some consumer advocates and smaller insurers, argue that a higher threshold could leave businesses exposed after a mid-sized attack, particularly in cities where property values and business-interruption losses can quickly exceed 5 million dollars but may not reach 10 million. That disagreement is not about whether to extend the programme, but about where to draw the line between private responsibility and federal sharing, and it is the first of the two differences that the Senate bill does not adopt.
How the terrorism insurance backstop actually works
Understanding the disagreement between the chambers requires understanding the mechanics, which are often described in shorthand that obscures how the programme actually functions. TRIA does not insure a building, a business, or a person directly. It requires insurers that write commercial property and casualty policies to offer terrorism coverage, and it promises that, if an act of terrorism is certified by the Treasury Secretary, the federal government will share a portion of insured losses above an industry-wide retention amount. Insurers first pay claims up to a deductible based on their own premium volume, then share losses with the government above that deductible, up to a cap of 100 billion dollars in total insured losses for a certified event. If losses exceed that cap, Congress would need to act to determine how further claims are handled. The structure is therefore a backstop for insurers, not a direct payment to victims, and its main effect is to make insurers willing to offer cover that they might otherwise refuse.
Two thresholds matter for the current debate. The first is the event-level bar: an event must cause at least 5 million dollars in insured losses under current law, rising to 10 million dollars under the House bill from 2029, before it can be certified at all. The second is the industry retention amount, which is currently set at 38.5 billion dollars, with individual insurers retaining a deductible of 20 percent of their direct earned premiums for commercial property and casualty lines in the preceding year. Those figures are large by design: they are meant to ensure that the federal government only steps in for events that are too large for the private market to absorb alone, while leaving ordinary losses, and even some significant terrorist attacks, to insurers and policyholders. The House bill does not change the retention amount or the individual deductible, only the certification threshold and the timing rule, which is why the debate is narrower than it may appear from headlines about a seven-year extension.
Certification itself is a formal step, made by the Treasury Secretary in consultation with other officials, including the Secretary of State and the Attorney General, and it requires a determination that an act was violent or dangerous to human life, property, or infrastructure, was committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy of a government by coercion, and caused the requisite level of insured losses. A certified act is not the same as a criminal conviction or a political designation, and the certification decision can itself become a subject of litigation or political dispute. The House bill’s 90-day rule would not change those substantive criteria, but it would impose a deadline on the process, which insurers argue would reduce the period during which they must reserve for an uncertified event without knowing whether federal sharing will apply.
None of this is abstract for the sectors that buy the cover. Commercial real estate developers, stadium and arena operators, hotels, transport hubs, factories and large construction projects commonly need terrorism insurance as a condition of financing. Lenders want to know that the asset securing their loan will be rebuilt after a catastrophic event, and insurers want to know that their own exposure is capped in a way they can model. When the backstop’s future is uncertain, brokers report, that chain gets harder to complete, and some deals slow down or get repriced even before any deadline arrives.
What the Senate passed, and where the two bills differ
The Senate’s version, S. 4395, was introduced in April 2026 by Senators Dave McCormick of Pennsylvania, Tina Smith of Minnesota, Thom Tillis of North Carolina and Ruben Gallego of Arizona, a bipartisan quartet that spans the Senate’s ideological range. The Senate Banking Committee advanced the bill unanimously, and the full Senate then cleared it by unanimous consent late on September 28, 2026, according to the Senate floor record as reported by trade press.
The Senate bill shares the House bill’s central goal: a seven-year extension through 2034. Where it differs is on the extras. The Senate version’s bill extends the existing framework cleanly, without raising the certification threshold and without the House bill’s additional provision setting a 90-day window for Treasury certification determinations. In other words, the Senate chose continuity, while the House chose continuity plus two updates.
That is a narrow gap by congressional standards, and both sides have reason to close it. Industry groups that backed both bills, including the American Property Casualty Insurance Association and the National Association of Mutual Insurance Companies, have urged Congress to reconcile the versions and send a long-term extension to the president before the end of the year. Their argument is practical rather than ideological: every month of uncertainty is a month in which multi-year policies and construction timelines must price in a risk that Congress has already agreed, in principle, to remove.
The politics of reconciliation, however, are not automatic. The House could accept the Senate’s clean version, the Senate could accept the House’s threshold and timing changes, or the two chambers could split the difference, for example by accepting the higher threshold but dropping or softening the certification window, or vice versa. Each option has a constituency. Insurers that favour a higher certification bar will prefer the House text; those that favour maximum stability will prefer the Senate text. The one outcome neither side wants is a stalemate that pushes the question into 2027, when the calendar pressure becomes acute and unrelated year-end legislation starts competing for floor time.
Why both parties backed the terrorism insurance extension
The breadth of support is worth noting because it cuts against the usual story of a divided Congress. In the House, the bill passed 373-15 under a procedure that requires a supermajority, which means it drew substantial support from both parties. In the Senate, it passed without objection and cleared committee unanimously. That kind of margin usually signals that a program is seen less as a partisan prize than as infrastructure: something businesses in every state rely on, whether or not their representatives agree on much else.
Part of the explanation is the program’s record. Supporters repeatedly note that no TRIA claim has ever been paid, which allows them to present the backstop as protection that has cost taxpayers virtually nothing in practice while enabling an enormous volume of private investment. The National Association of Mutual Insurance Companies has argued that the backstop has enabled virtually every large-scale development of the past quarter-century, from stadiums and factories to commercial buildings and transport hubs, along with the jobs needed to build and staff them. That claim is an industry group’s characterisation, not an independent audit, but it captures why the program’s supporters treat it as economic infrastructure rather than as a subsidy.
Another part of the explanation is the coalition behind it. Before the House from the mutual insurers’ association was cosigned by the Coalition to Insure Against Terrorism, the Council of Insurance Agents and Brokers, the Independent Insurance Agents and Brokers, the American Bankers Association and the Reinsurance Association of America. Business groups including the U.S. Chamber of Commerce and the American Bankers Association have also backed reauthorization, arguing that predictable terrorism coverage supports lending for commercial real estate, construction and large venues. When insurers, brokers, banks and commercial policyholders line up on the same side, a bill’s path through Congress gets considerably easier.
There is also a defensive logic at work. Lawmakers who lived through the post-2001 insurance disruption, or who have studied it, do not want to be the Congress that let the backstop lapse and then had to rebuild it under crisis conditions. Passing an extension years early is, in that sense, the cheapest form of risk management available to Congress: it costs little political capital now and avoids a potentially expensive scramble later. The fact that both chambers moved in the same year, even on different texts, suggests that logic is widely shared.
What happens next, and what happens if TRIA expires
The next step is procedural but decisive. Because the House and Senate have passed different texts, the two versions must be reconciled into one bill that both chambers approve in identical form before it can go to the president. That can happen by one chamber simply accepting the other’s bill, or by a conference or informal negotiation producing a compromise text that each chamber then passes again. No timetable for that step has been publicly fixed, and trade groups are pressing for action before the end of the year rather than waiting for the 2027 deadline to force the issue.
If Congress failed to act before December 31, 2027, the consequences would not be a single dramatic event but a slow unravelling. Insurers would no longer be required to offer terrorism coverage on the same terms, and the federal cost-sharing promise would lapse. Some insurers would probably continue to offer terrorism cover privately, but at higher prices or with narrower terms, particularly for high-profile targets in major cities. Lenders might require more cover, or different cover, as a condition of financing, and some projects could be delayed or repriced. That is the scenario supporters warn about, and it is why they treat early reauthorization as urgent even though the deadline is more than a year away.
It is also worth being precise about what reauthorization would not do. It would not make terrorism insurance free, it would not guarantee that any particular property can be insured at any particular price, and it would not change the fact that a certified act of terrorism must still meet the program’s thresholds before federal sharing begins. What it would do is preserve a framework that the private market has organised itself around for more than two decades. For a program whose main achievement, according to its supporters, is that it has never been tested by a qualifying claim, that preservation is the point.
For now, the story of TRIA in the 119th Congress is a story of agreement on the destination and disagreement on the details. Both chambers want the program extended through 2034. They differ on whether to raise the certification threshold to 10 million dollars in 2029 and on how tightly to script Treasury’s certification timetable. Resolving that difference is a small legislative task with large economic stakes, and the speed with which Congress resolves it will tell businesses whether the backstop they have planned around for twenty-four years will still be there when they need it.
Sources
USN reviewed reporting from multiple outlets for this story. Read more from House Financial Services Committee, Insurance Journal and Insurance Business Magazine.