Recent US terrorism legislation should lead to a fall in the cost of terrorism insurance. That's according to a new Moody's report.

The Risk Insurance Act of 2002 (TRIA) was passed in the US to provide a backstop federal reinsurance to insurers for losses caused by terrorist attacks.

Prior to TRIA, insurers were not fully insuring against biological and chemical terrorism.

TRIA now provides a backstop for such attacks, which the report suggests will force terrorism insurance rates down.

Moody's analyst Daniel Rubock said: "Because the passage of TRIA now requires insurance companies to offer terrorism insurance, we may begin also to see prices for terrorism insurance come down."

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