Texas Property and Casualty License Practice Exam

Under the Terrorism Risk Insurance Act, who must certify an event as an eligible act of terrorism?

1. The Federal Insurance Office

2. The Secretary of State and the Attorney General

3. The President of the United States

4. The Federal Reserve

The correct answer is: The Secretary of State and the Attorney General

The correct answer is that the Secretary of State and the Attorney General must certify an event as an eligible act of terrorism under the Terrorism Risk Insurance Act (TRIA). This certification process is crucial because it establishes the parameters and criteria for what constitutes an act of terrorism for the purposes of insurance coverage. Under TRIA, an event must meet specific conditions related to the intent to harm and the scale of damage to be recognized as an eligible act of terrorism. This ensures that the event is not just any violent act, but one that poses a significant threat to public safety and has implications for national security. The Secretary of State and the Attorney General are tasked with evaluating and certifying events that align with these criteria due to their roles in international relations and law enforcement, respectively. Their certification is essential for triggering the governmental backstop for insurance claims, which helps stabilize the insurance market in the face of large-scale attacks. The other roles listed, such as the Federal Insurance Office or the Federal Reserve, do not have the specific authority to certify acts of terrorism under TRIA, and the President’s involvement is not part of the certification process. Understanding this structure helps clarify the responsibilities laid out in TRIA and the intended protection for insurers and policyholders in the