Two industry analyses on the potential industry impact of the Terrorism Risk Insurance Act extension warn insurers that they need to reassess their exposure strategies and that TRIA ramifications could include a capacity shortage in some areas.

Reports by AIR Worldwide Corporation and insurance broker Marsh, a subsidiary of Marsh & McLennan Companies, detail the changes made under the TRIA extension bill, which increased the certification trigger for insurers and decreased the percentage of the federal government's share of loss over the next two years before the act sunsets.

(The certification trigger==the level of damage at which the federal terrorism insurance backstop kicks in--will increase from the current $5 million to $50 million in 2006 and $100 million in 2007. Deductibles and co-participation percentages of insurers will be increased in each year as well.)

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