The federal government entered the business of reinsuring insurance companies for terrorism losses after the events of 9/11. As I’ve noted in a previous blog post, the federal government does not book a liability for anticipated future losses in this program.
However, the Office of Management and Budget does include a line item for “Terrorism Insurance Program” among the 4,500 line items in its calculation of “Budget Authority” in the years ahead.
Here’s a look at this line item as it currently appears on the OMB website.
“Budget Authority” rises significantly / dramatically after 2015. Questions arise how the government calculates this amount, and what actual expenditures might look like after a significant terrorism event.