Lawmakers at a hearing Tuesday explored ways to beef up punishments for ransomware attacks against hospitals, possibly by labeling them as more severe crimes.

One proposal floated at the House Homeland Security Committee hearing, to treat ransomware attacks as terrorism, is an idea Congress has flirted with before. Another would be to press prosecutors to pursue homicide charges in attacks on hospitals where death resulted — something German authorities also once pondered.

A former top FBI cyber official, Cynthia Kaiser, put forward both ideas at the hearing, a joint meeting of the subcommittees on Border Security and Enforcement and Cybersecurity and Infrastructure Protection on cybercrime, drawing questions and interest from members.

“I believe there are no penalties too severe for individuals that would target our health care system,” said Mississippi Rep. Michael Guest, chair of the border subcommittee, whose home state of Mississippi’s health care clinics closed following a February ransomware attack.

The suggestions stem from a growing focus by ransomware attackers on the health care sector, with incidents doubling from 238 in 2024 to 460 in 2025 according to FBI statistics, making it the top targeted sector.

Kaiser, now senior vice of the Halcyon ransomware research center, said terrorism designations from the State, Treasury and Justice departments could lead to further sanctions, restricted travel and other punishments. Justice Department guidance on homicide charges could clarify its authorities, she said.

“It sounds like the language is there, it just has not been applied in these circumstances,” said Rep. Lou Correa of California, the top Democrat on Guest’s subpanel.

The notion of more closely entwining cyberattacks and terrorism is something both Congress and the executive branch have examined recently.

The fiscal 2025 Senate intelligence authorization bill would have directly linked ransomware to terrorism, although the final version of the bill that became law was less explicit than the original Senate language. The Treasury Department last month asked for public feedback on changing a terrorism risk insurance program to address cyber-related losses.

A University of Minnesota study from 2023 estimated that hospital ransomware attacks were responsible for dozens of deaths of Medicare patients. German authorities in 2020 opened a negligent homicide investigation following a death in the aftermath of a ransomware attack, but ultimately decided against charges.

The Trump administration’s national cyber strategy advocates for taking a more offensive approach to hackers. It released an executive order on cybercrime and fraud the same day it published the strategy. Kaiser said the proposals are in line with those approaches.

Hackers know their attacks could end lives, she said. “They have simply decided these deaths are someone else’s problem,” Kaiser said.

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The Treasury Department is soliciting public feedback on whether it should change a terrorism risk insurance program to address cyber-related losses.

In a Federal Register notice set for publication Wednesday, Treasury seeks comment from the public for a mandatory report it must deliver to Congress this summer on the effectiveness of the terrorism risk insurance program (TRIP) created by the 2002 Terrorism Risk Insurance Act. That law arose from the Sept. 11 terror attacks and provided a federal backstop to make terrorism risk insurance more available and affordable.

Some experts have suggested that the cyber insurance industry should also get a federal backstop as the industry struggles to develop fully. With the law set to expire at the end of 2027, tying it to the reauthorization of the terrorism risk insurance law could be one way to get Congress to create such a cyber backstop.

Among the topics Treasury hopes commenters will address before it sends the report to Congress in June is the interaction between the terrorism risk insurance law and program, and cybersecurity. The agency will accept comments until May 8.

That includes: “Any potential changes to TRIA or TRIP that would encourage the take up of insurance for cyber-related losses arising from acts of terrorism as defined under TRIA, including, but not limited to the potential modification of the lines of insurance covered by TRIP and revisions to any of the current sharing mechanisms for cyber-related losses, such as, for example, the individual insurer deductible or the federal share percentage.”

In 2021, Treasury issued a rule making it clear that TRIP could cover cyber losses when written in a TRIP-eligible line of insurance. However, a Government Accountability Office report last year outlined some of the limitations there.

“Because TRIA was designed specifically as a federal backstop for losses from acts of terrorism, only losses from cyberattacks certified by Treasury as acts of terrorism would have TRIA coverage,” it states. “As a result, even large cyberattacks that result in catastrophic losses would not be covered under TRIA if they were not certified as acts of terrorism.”

Treasury said in its Federal Register notice that it wants feedback on cyber-related terrorism losses within TRIP and losses outside of it.

Cyberattacks would need to meet definitions under the terrorism risk insurance law to be certified. They need to be violent or otherwise dangerous to life, property or infrastructure, and designed to influence the U.S. population or government. Damage to U.S. organizations outside the United States still might not qualify.

Medical device maker Stryker recently suffered a wiper attack, with the pro-Palestinian, Iranian government-linked group Handala taking credit. It said the attack was in retaliation for U.S. and Israel military strikes against Iran, specifically a U.S. missile strike on a school that killed 175 people, according to Iran’s government.

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Sixty million school children’s personal information exposed. Thousands of flights canceled. A venerated retailer brought to its knees. Dire warnings from public officials about urgent threats to our national security.

This isn’t speculative fiction. These are all real incidents that have happened in the last year. The stakes in cyberspace are high and growing, especially as the LLM boom means society is increasingly reliant on software. Yet, repeated incidents show we are not doing enough to protect ourselves from cybercriminals or adversary nation-states. Unfortunately, Congress appears poised to leave a key tool on the shelf that could raise our cyber defenses: insurance.

In other areas of risk, insurance has a proven track record of both reducing the likelihood of incidents and helping with recovery when they do occur. Consider homeowners’ insurance: If you act recklessly—maybe by deep frying your Thanksgiving turkey indoors—your insurer may deny your claim, which incentivizes you to avoid risky behavior. Insurers also lower your premium if you make safety and security investments, like installing smoke detectors. And if a fire still breaks out, your insurance helps you recover quickly by covering the cost of repairs and even paying for a hotel room while your house is fixed.

The same set of virtuous incentives increasingly applies in cybersecurity. Cyber insurers have already shown their value in helping victims recover. Now, they are increasing underwriting standards and are even beginning to deny claims if they find reckless behavior or insufficient security investments. Policymakers should be overjoyed, as insurance represents the kind of market-based solution for cybersecurity challenges that both Democrats and Republicans have long embraced.

But there’s a problem: cyber insurance is marked by a persistent coverage gap. Today, about 90 percent of cyber damages are not insured. And the gap is being exposed. In the wake of the $2.5 billion hack of Jaguar Land Rover, the CEO of the United Kingdom’s Financial Conduct Authority said last week that the UK is “potentially massively underinsuring.”

The coverage gap exists for several reasons, including a lack of awareness of cyber insurance, since it’s a relatively new product and because it is rarely required by contracts or regulations. But as we argued in a paper published in June, one of the biggest obstacles for the industry is the risk of a “systemic” incident—and the difficulty insurers have in diversifying their policyholders to mitigate that risk.

Normally, insurers have many ways to make sure risk is “uncorrelated,” meaning the likelihood of a claim is independent of another. For example, when insuring businesses, they might aim to diversify by location, business size, or industry. This approach helps prevent all policyholders from filing claims at the same time, because of a single event or other underlying factor.

Unfortunately, that diversity is hard to come by in cyberspace. The information technology we rely on is functionally the same, no matter the location, business size or industry. For insurers, the complexity of software systems and the lack of historical claims data makes it extremely difficult to predict large-scale cyber events. This uncertainty causes insurers to raise premiums or limit coverage. As a result, the organizations that would benefit most from cyber insurance can struggle to find adequate coverage.

Fortunately, there is a practical policy solution: A government-backed reinsurance program. Such a program can cap the losses insurers face if a cyber catastrophe — known as a “grey swan” event — occurs. Even if disaster never strikes, the mere existence of this financial backstop helps lower cyber insurance costs, benefitting the entire economy. If a massive cyber incident does happen, the backstop ensures that cyber insurers continue to operate and support their policyholders. It also protects taxpayers through a built-in recoupment process. This backstop approach has worked before; after the September 11 attacks, the Terrorism Risk Insurance Program (TRIP) kept terrorism insurance market from collapsing. 

Unfortunately, Congress is set to pass on a critical opportunity to enact this common-sense proposal. At a hearing last month on reauthorizing the TRIP, policymakers only seemed focused on whether or not “cyber terrorism” would qualify for the existing program.

To be clear, we agree that acts of cyber terror fall within the scope of the existing program. However, terrorism is not the acute national security threat facing us in cyberspace. Time and again, assessments of cyber threats by governments and private industry point to financially-motivated criminals and nation-state actors, not politically-motivated terror groups. A clear example of the kind of threat that should concern policymakers is NotPetya, a state-sponsored cyberattack launched by Russia against Ukraine in 2017. The attack quickly spread worldwide, causing billions of dollars in damages.

Congressional leaders are asking the wrong question. They should be asking: are the cyber incidents costing billions of dollars in damage each year covered by TRIP? If there was another NotPetya-style incident targeting American businesses, would it be covered by TRIP? How much damage have insurers themselves assessed a systemic event would cause?

A cyber reinsurance program should be different from TRIP. We encourage cybersecurity leaders, like House Homeland Security Committee Chairman Rep. Andrew Garbarino, to hold a new set of hearings on the topic with a goal of developing a legislative solution. However, in our experience, Congress moves fastest when there is a deadline. In the case of TRIP, a deadline is approaching: the program must be reauthorized by the end of next year. If Congress doesn’t use this opportunity to address cybersecurity and insurance, the issue could remain unresolved for almost another decade.

We don’t have that kind of time. Cyber terrorism is not what’s keeping us up at night. It’s cyber criminals and adversary states. Let’s hope Congress takes another shot at addressing the real challenges in cybersecurity and the critical role market-based solutions can play in protecting our nation.

Nicholas Leiserson is Senior Vice President for Policy at the Institute for Security and Technology. He previously served in the White House Office of the National Cyber Director and as a senior Congressional staffer focused on cyber issues.

RADM (Ret.) Mark Montgomery is senior director of the Foundation for the Defense of Democracies’ Center on Cyber and Technology Innovation. Mark served for more than three decades in the U.S. Navy, held senior leadership roles in Congress, and served as Executive Director of the Cyberspace Solarium Commission.

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