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1 1 (September 24, 2020)

handle is hein.crs/govdcah0001 and id is 1 raw text is: Researh Sevice Insurance and Unexpected Risks: COVID-19 in 2020 and Terrorism in 2001 September 24, 2020 The Coronavirus Disease 2019 (COVID-19) pandemic has disrupted the economy across the United States and the world, due to both the direct effects of the virus and the various public health measures imposed to address the disease. Many affected businesses have looked to their insurance policies to recoup some of their losses. The final extent of insurance coverage is unclear, particularly due to uncertainty around insurance policy language that may exclude virus-related losses. (For more information, see CRS Insights IN11295, IN11382, and IN 11383.) Even if such exclusions are upheld, insured losses are estimated to be in the tens of billions of dollars, likely outstripping the insured losses from the September 11, 2001 terrorist attacks. The unexpected losses from the 2001 attacks caused significant disruptions in terrorism insurance markets, leading Congress to step in with the Terrorisn Risk Insurance Act (TRIA; 15 UoS.C. 6701 Note). With COVID-19 also likely causing disruptions in insurance coverage, some in Congress are considering terrorism insurance as a potential model. Representative Carolyn Maloney has introduced the Pandemic Risk Insurance Act of 2020 (PRIA; H.R. 7011), modeled on TRIA. This Insight compares the primary features of TRIA with PRIA. Comparing Terrorism Risk with Pandemic Risk As Congress considers responding to the COVID-19 pandemic, similarities in the COVID-19 pandemic and the 2001 attacks may make TRIA a natural model. However, there are differences that may inform legislation, including the following Size and scope of losses. Total losses from the 2001 attacks were unexpectedly large, at approximately $47 billion in current dollars, but they were concentrated in a particular area and were generally manageable within the capital structure of the insurance industry. Total policyholder surplus for the U.S. insurance industry at the time was approximately $425 billion in current dollars, and much of the terrorism exposure was spread around the world through foreign reinsurance. The financial impact of the COVID- 19 pandemic is expected to be larger than that of the 9/11 attacks. Insured loss estimates are still uncertain, but some have been quite large, as Congressional Research Service https://crsreports.congress.gov IN11511 CRS NStGHT Prepaimed for Mernbei-s and Com mninttees 4 o. C- --q .. . . . . . . . ...-----------------------------------------------------------------------------------------------------------------------------------------------------------------------

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