What effect does the Terrorism Risk Insurance Act of 2002 have on the war and military action exclusion with regard to property and casualty insurance?

The Terrorism Risk Insurance Act (TRIA) of 2002 was enacted to provide a federal backstop for insurance claims related to acts of terrorism. It specifically addresses the exclusion that typically applies to war and military action in property and casualty insurance. By nullifying the exclusion of certified acts of terrorism, TRIA allows policyholders to receive coverage for damages resulting from specific terrorist acts that meet the certification criteria outlined in the act.

This means that while military actions and general acts of war remain excluded from coverage, certified acts of terrorism are treated differently, and insurers are obliged to pay certain claims resulting from those acts, thus ensuring that victims can receive compensation for their losses. The act was designed to help stabilize the insurance marketplace following the September 11 attacks, when the risk of terrorism significantly impacted insurers and policyholders alike.

While the other options imply modifications or complete eliminations of exclusions, the essence of TRIA is focused specifically on providing coverage for defined terrorist acts, rather than altering the overarching exclusions for war and military actions. This precise focus on certified acts is what makes the correct answer clear.