News - Bill's Blog

Accounting for terror -- part II

March 22, 2016

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.

 
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