Congress quietly extends terrorism insurance backstop, delays insurer cost recovery
S. 4395 — Terrorism Risk Insurance Program Reauthorization Act of 2026 · Filed by Dave McCormick (R-PA) · 36 cosponsors · Introduced Apr 27, 2026 · Referred to committee
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What it does
This bill extends the federal Terrorism Risk Insurance Program (TRIP) by seven years, from its current 2027 expiration to 2034. TRIP requires insurers to cover terrorism-related losses up to a federal backstop, after which the government covers additional claims. The bill also delays the timeline for insurers to recoup their terrorism-loss payouts from policyholders through surcharges, pushing recoupment deadlines out by 7 years as well.
Why we flagged it
The bill's sole operative function is to extend an existing federal terrorism-risk insurance backstop and adjust recoupment timelines. It is a routine reauthorization of a longstanding program, not a new policy or carve-out.
What the text implies
- Deferred recoupment timelines may concentrate premium surcharges into later years, creating potential for sharp rate increases when multiple recoupment cycles align.
- Extended federal backstop reduces insurer incentive to price terrorism risk accurately in the near term, potentially masking true risk costs from policyholders.
The full analysis lists 3 implications of this text.
Who stands to gain
property and casualty insurers; commercial real estate and large-building owners (reduced terrorism insurance costs)