Title The impact on workers' compensation insurance markets of allowing the Terrorism Risk Insurance Act to expire / Michael Dworsky, Lloyd Dixon

Published [Santa Monica, California] : Rand Corporation, [2014] ©2014

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Description 1 online resource (20 pages) Series Policy brief / Rand Corporation Policy brief (Rand Corporation) Summary Congress enacted the Terrorism Risk Insurance Act (TRIA) in 2002, in response to terrorism insurance becoming unavailable or, when offered, extremely costly in the wake of the 9/11 attacks. The law provides a government reinsurance backstop in the case of a terrorist attack by providing mechanisms for avoiding an immediate drawdown of capital for insured losses or possibly covering the most extreme losses. Extended first in 2005 and again in 2007, TRIA is set to expire at the end of 2014, and Congress is again reconsidering the appropriate government role in terrorism insurance markets. This policy brief examines how markets for workers' compensation (WC) insurance would be affected if TRIA were to expire. They explain that TRIA expiration would affect WC insurance markets differently from other insurance markets because WC statutes rigidly define the terms of coverage, such that in a post-TRIA world insurance companies would limit their terrorism risk exposure by declining coverage to employers facing high terrorism risk. Because WC coverage is mandatory for nearly all U.S. employers, employers that cannot purchase coverage would be forced to obtain coverage in markets of last resort. Migration of terrorism risk to these markets of last resort would increase the likelihood that WC losses from a catastrophic terror attack would largely be financed by businesses and taxpayers throughout the state in which the attack occurs, adding to the challenge of rebuilding in that state. TRIA, in contrast, spreads such risk across the country Notes "RR-643-CCRMC"--Page 4 of cover "RAND Center for Catastrophic Risk Management and Compensation"--Page 4 of cover Bibliography Includes bibliographical references Notes Print version record Subject United States. Terrorism Risk Insurance Act of 2002. SUBJECT Terrorism Risk Insurance Act of 2002 (United States) fast Subject Terrorism insurance -- Government policy -- United States Workers' compensation -- United States LAW -- Labor & Employment. Workers' compensation United States Form Electronic book Author Dixon, Lloyd S., author. Rand Corporation, issuing body. RAND Center for Catastrophic Risk Management and Compensation. ISBN 9780833086983 0833086987

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