State Farm Insurance License Practice Exam

The Terrorism Risk Insurance Act (TRIA) primarily aims to ensure what?

1. Affordable insurance for natural disasters

2. Accessibility of insurance for terrorism-related losses

3. Support for international insurance claims

4. Protection for businesses against cyber threats

The correct answer is: Accessibility of insurance for terrorism-related losses

The Terrorism Risk Insurance Act (TRIA) was enacted to address the difficulties that insurers faced in providing coverage for losses resulting from acts of terrorism. The primary focus of TRIA is to enhance the availability and affordability of terrorism insurance for businesses and other entities that might be adversely affected by such risks. By establishing a federal backstop for insurance claims that arise from certified acts of terrorism, TRIA encourages insurance carriers to offer coverage without fear of catastrophic loss, ultimately fostering a more stable insurance environment. This is particularly important for businesses that may not have the financial resources to absorb the risk associated with potential terrorist acts. The other options do not align with the aims of TRIA. For instance, the act does not specifically focus on natural disasters, international claims, or cyber threats, as these fall outside the scope of terrorism-related insurance issues. Instead, TRIA's design is directly tied to providing a safety net for insurance providers and policyholders facing the unique risks associated with terrorism, ensuring greater accessibility to necessary coverage.