Claims News Service, Oct. 31, 2:30 p.m. EST — A RAND Corporation report issued recently says the Terrorism Risk Insurance Act (TRIA), which will expire in December unless extended by Congress, creates an effective mechanism for sharing the financial risk that businesses face from terrorism.

The report also suggests that the federal government consider encouraging uninsured businesses to buy terrorism insurance coverage, because somewhat less than half of all businesses now do so.

In addition, the study says that terrorism insurance provided under TRIA would not require federal subsidies unless there is a very large terrorist attack on the scale of the Sept. 11, 2001 terrorist strike on the World Trade Center, or a series of large terrorist attacks within a year. This is because federal subsidies to insurance companies are only triggered if TRIA-covered insured losses exceed $15 billion.