PRIA — The Diversification Penalty
1 min readJul 26, 2020
First published June 10, 2020
The proposed Pandemic Risk Insurance Act (PRIA) leverages the backstop framework developed for the Terrorism Risk Insurance Act (TRIA).
In this video, the Centers for Better Insurance explores how the federal backstop under TRIA penalizes the otherwise prudent diversification of risk. PRIA’s narrow focus on business interruption and event cancellation insurance exacerbates this disconnect between the amount of an insurer’s backstop deductible and risk of incurring losses subject to the program.
Current videos in the Pandemic Risk Insurance Act series:
Episode 2: The Diversification Penalty
Episode 3 will look into the role captive insurance companies have played in TRIA and would likely play should PRIA be enacted.
