U.S. Senator Tina Smith’s Bipartisan Legislation to Extend Terrorism Risk Insurance, Support Housing Construction Passes Banking Committee

Roughly 60 percent of American businesses have terrorism risk insurance, which is critical to major construction projects WASHINGTON, D.C. – U.S. Senator Tina Smith’s bipartisan legislation to safeguard the availability of terrorism risk insurance coverage passed the Senate Banking Committee by a unanimous vote. Roughly 60 percent of American businesses have terrorism risk insurance, which could become unavailable without action by Congress. Sen. Smith (D-MN) leads the Terrorism Risk Insurance Program Reauthorization Act of 2026 alongside Senators Dave McCormick (R-PA), Ruben Gallego (D-AZ),  and Thom Tillis (R-NC). Following the attacks on September 11, 2001, many insurance companies began excluding terrorism risks from commercial insurance policies, leaving businesses and industries without access to coverage. Since insurance is a precondition for commercial lending and real estate transactions, this gap in coverage threatened broad economic damage across real estate, construction, energy, transportation, and related industries. Congress responded by passing the Terrorism Risk Insurance Act of 2002 (TRIA), creating a federal reinsurance backstop to stabilize the private market and ensure that commercial policyholders could continue to obtain terrorism risk coverage. The private insurance market has relied on the TRIA backstop ever since. When TRIA briefly lapsed in December 2014, terrorism exclusions that insurers had pre-filed with state regulators took effect automatically, making terrorism coverage effectively unavailable across commercial policies nationwide. As a result, terrorism risk coverage was removed from policyholders immediately and without notice. Given that the current threat landscape remains elevated, allowing a similar lapse in terrorism coverage would expose policy holders to unnecessary financial risk and uncertainty. “Without this bill, a potential terrorism event would mean an even greater financial catastrophe for businesses and taxpayers. It’s critical that we keep terrorism risk insurance available and affordable to businesses in Minnesota and across the country,” said Senator Smith. “I’ve worked to preserve the Terrorism Risk Insurance Program measure throughout my time in the Senate. Extending this law will ensure housing development and major events can continue – lowering costs for Minnesotans and creating new jobs. I’m heartened to see it pass with such strong bipartisan support and urge the full Senate to pass this bill.” The Terrorism Risk Insurance Program Reauthorization Act of 2026 would extend TRIA by seven years. Acting before the program expiration date of December 31, 2027, provides long-term market certainty and would prevent policyholders from facing a gap in coverage. The Terrorism Risk Insurance Act is also backed by: The American Property Casualty Insurance Association Council of Insurance Agents and Brokers Independent Insurance Agents & Brokers of America National Association of Mutual Insurance Companies Reinsurance Association of America Coalition to Insure Against Terrorism Nareit Real Estate Roundtable Commercial Real Estate Finance Council ###