The U.S. Treasury Department has released a report on theTerrorism Risk Insurance Act of 2002. Under the terms of the act,the department, as administrator of the program was required toperform an assessment and report to Congress on its findings byJune 30, 2005.

Specifically, the department examined the effectiveness of theprogram, the availability and affordability of such insurance forvarious policyholders, and the likely capacity of the property andcasualty insurance industry to offer insurance for terrorism riskafter the expiration of the program.

The report finds that TRIA has achieved its goals of supportingthe industry during a transitional period and stabilizing theprivate insurance market, but does not recommend extending theprogram. The economy is more robust today than when TRIA wasenacted, the report states, and extending it would have littleimpact on the economy, given its current strength. It is theTreasury's view that continuation of the program in its currentform is likely to hinder the further development of the insurancemarket by crowding out innovation and capacity building.

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