Governing Alongside the Specter of Risk Society: Legislating US Terrorism Risk Insurance, 2001-2007

Author:Philip D. Bougen
Position:Anderson School of Management, University of New Mexico, Albuquerque, NM 87131, USA
Pages:33-41
The Open Law Journal, 2009, 2, 33-41 33
1874-950X/09 2009 Bentham Open
Open Access
Governing Alongside the Specter of Risk Society: Legislating US Terror-
ism Risk Insurance, 2001-2007
Philip D. Bougen*
Anderson School of Management, University of New Mexico, Albuquerque, NM 87131, USA
Abstract: The continued extension of the Terrorism Risk Insurance Act (TRIA) providing federal financial support to the
insurance industry in the event of further terrorist attacks in the US does not reflect the advent of a risk society of uninsur-
able danger. While the specter of risk society has tracked and influenced the legislative process, it has done so discontinu-
ously and often contentiously. Instead, the legislative trajectory reveals the current insurance arrangements as being
shaped by a heterogeneous collection of analyses, calculations and concerns as legislators have sought to govern the in-
surability of terrorist acts. The paper addresses how, why and with what implications governmental endeavors can become
implicated with risk society concepts.
INTRODUC TION
Let me begin by stating some very simple facts…. We do
not know where it is going to occur. We do not know when it
is going to occur. We do not know how often it is going to
occur. And we do not know how much it is going to cost
when it does occur. It is an uninsurable event for all practi-
cal and theoretical purposes (US House, July 27, 2005: 54,
emphasis added).
The above comment about a possible terrorist attack in
the US and its insurability was made by an insurance indus-
try representative at a Congressional hearing in support of an
extension of the Terrorism Risk Insurance Act (TRIA) be-
yond its originally scheduled 3 year duration. First discussed
immediately after 9/11, TRIA provides federal financial sup-
port to the insurance industry in the event of further terrorist
attacks in the US. TRIA was enacted into law in 2002 with
explicit recognition of its anticipated temporary status. The
legislation was extended in 2005 until 2007 and then again in
December 2007 for a further 7 year period, seemingly sup-
porting the insurance industry’s position of the practical and
theoretical uninsurability of the event and Beck’s (1992,
1999) risk society thesis of the emergence of uninsurable
catastrophic dangers. Yet as the legislative trajectory of
TRIA shows, over the period 2001-2007 legislators in seek-
ing to govern what became known as terrorism risk explored
these ‘very simple facts’ and the issue of ‘practical and theo-
retical’ uninsurability. More significantly for this paper, in
doing so, legislators encountered the connectivity of gov-
ernmental processes and risk society arguments. Risk society
arguments of the practical and theoretical uninsurability of
terrorism risk provided an early important impetus for legis-
lation and the initial framework for deliberations. Impor-
tantly, this framework and residues of the established insur-
ance relationships have stubbornly although unevenly per-
sisted, impacting subsequent government endeavors and
policies.
*Address correspondence to this author at the Anderson School of Man-
agement, University of New Mexico, Albuquerque, NM 87131, USA
E-mail: bougen@mgt.unm.edu
It is this positioning of risk society arguments alongside
governmental processes that the paper addresses. The issue
of the insurability of terrorism risk has been approached ei-
ther from an abstract risk society perspective or from the
perspective of the insurance industry and insureds (Ericson
and Doyle, 2004). Largely absent from consideration have
been the governmental and legislative processes involved in
the determination of the ensuing insurance arrangements.
Legislators first debated terrorism risk insurance immedi-
ately after 9/11, unfamiliar with its relative properties as an
issue of governmental concern and of appropriate govern-
mental practice, and with risk society arguments of uninsur-
ability at the forefront of the debate. From the earliest legis-
lative deliberations, however, the trajectory of TRIA rather
than being characterized by a risk society paralysis of unin-
surability displayed a dynamic governmental concern to
learn about an unfamiliar problem and to consider appropri-
ate legislative responses. Issues as to whether there existed
necessary and legitimate reasons for federal involvement
were persistently raised, reflecting a concern with how pre-
cisely to govern the insurability of terrorism risk.
The paper provides a detailed analysis of the US legisla-
tive debates surrounding TRIA during the period 2001-2007.
The choice of this empirical material was premised upon one
central consideration. The longitudinal analysis of the legis-
lative debates, involving many of the same participants, of-
fers the chance to examine some of the moving rationales,
problems, opportunities and contingencies that shaped the
governmental trajectory of TRIA. The paper argues that any
consideration of risk society should be considered less from
the perspective of the underlying validity of its absolute ra-
tionale of the advent of uninsurable catastrophic risks.
Rather, of greater significance is how, why and with what
implications the potency of risk society arguments can affect
governmental endeavors and how in a process of reciprocal
interaction risk society arguments themselves can also be-
come modified during governmental processes. Governmen-
tal endeavors and risk society are, th erefore, in unstable and
continuously moving interaction: the assessment of which a
legislator involved in drafting the initial legislation described
as “a thankless task” (US Senate, June 13, 2002: S5478).

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