What percentage of insured losses does the government cover after thresholds under TRIA?

Prepare for the CAS Exam 6 with detailed study materials. Use flashcards and multiple-choice questions, each with hints and explanations, to get exam-ready!

Multiple Choice

What percentage of insured losses does the government cover after thresholds under TRIA?

In TRIA, once the loss threshold is met and the program activates, the federal government backstops terrorism losses by bearing the majority of the cost. Specifically, the government pays 85% of insured losses, while private insurers cover the remaining 15%. This backstop helps stabilize the market after a catastrophic terrorist event. For example, if losses above the deductible reach $1 billion, the government would pay about $850 million and insurers about $150 million.

In TRIA, once the loss threshold is met and the program activates, the federal government backstops terrorism losses by bearing the majority of the cost. Specifically, the government pays 85% of insured losses, while private insurers cover the remaining 15%. This backstop helps stabilize the market after a catastrophic terrorist event. For example, if losses above the deductible reach $1 billion, the government would pay about $850 million and insurers about $150 million.

More practice questions