TRIA was designed to stabilize the private market after which event?

• A. The September 11, 2001 terrorist attacks
• B. Hurricane Katrina
• C. The 2008 financial crisis
• D. The 2011 earthquake

Answer: (A)

TRIA is about stabilizing the private insurance market when huge, systemic losses come from terrorism by providing a federal backstop that shares the burden with private insurers. It was created in response to the massive insured losses from the September 11, 2001 terrorist attacks, when fear of repeated or larger terrorist events threatened insurers’ willingness to offer affordable terrorism coverage. The idea is to keep terrorism insurance available and affordable by ensuring a government-supported framework rather than leaving the market to potentially withdraw or raise prices dramatically after a major attack. So, the event that led to TRIA’s design was the September 11 attacks, not natural disasters like hurricanes or earthquakes or other financial crises.