Establishment of Commission on Terrorism Risk Insurance

Title I of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended by adding at the end the following new section:

109.

Commission on Terrorism Risk Insurance

(a)

In general

There is hereby established the Commission on Terrorism Risk Insurance (in this section referred to as the Commission). (b)

Membership

(1)The Commission shall consist of 11 members, as follows: (A)The Secretary of the Treasury or the Secretary’s designee. (B)One State insurance commissioner designated by the members of the NAIC. (C)Nine members appointed by the President, who shall be— (i)a representative of State legislatively created workers' compensation funds; (ii)a representative of property and casualty insurers with direct written premium of $1,000,000,000 or less; (iii)a representative of property and casualty insurers with direct written premium of more than $1,000,000,000; (iv)a representative of multiline insurers; (v)a representative of independent insurance agents; (vi)a representative of insurance brokers; (vii)a policyholder representative; (viii)a representative of the survivors of the victims of the attacks of September 11, 2001; and (ix)a representative of the reinsurance industry. (2)

Secretary

The Program Director of the Terrorism Risk Insurance Act shall serve as Secretary of the Commission. The Secretary of the Commission shall determine the manner in which the Commission shall operate, including funding and staffing. (c)

Duties

(1)

In general

The Commission shall identify and make recommendations regarding— (A)possible actions to encourage, facilitate, and sustain provision by the private insurance industry in the United States of affordable coverage for losses due to an act or acts of terrorism; (B)possible actions or mechanisms to sustain or supplement the ability of the insurance industry in the United States to cover losses resulting from acts of terrorism in the event that— (i)such losses jeopardize the capital and surplus of the insurance industry in the United States as a whole; or (ii)other consequences from such acts occur, as determined by the Commission, that may significantly affect the ability of the insurance industry in the United States to independently cover such losses; and (C)significantly reducing the expected Federal role over time in any continuing Federal terrorism risk insurance program. (2)

Evaluations

In identifying and making the recommendations required under paragraph (1), the Commission shall specifically evaluate the utility and viability of risk-sharing mechanisms under which insurers voluntarily reinsure terrorism losses between and among themselves that are not subject to reimbursement under section 103, a Federally created or mandated reinsurance facility, empowering such a facility to issue pre-event financing bonds, post-event financing bonds, assessments, single or multiple pooling arrangements, and other risk sharing arrangements to accomplish, in whole or in part, the specified objectives. (3)

Redevelopment assessment

The Commission shall also evaluate whether or not coverage under the Program under this Act is necessary to permit redevelopment at the sites of any previous acts of terrorism. If the Commission determines that the market will not provide for renewal of, or generation of new, insurance contracts necessary to permit such redevelopment, the Commission shall recommend coverage under the Program under this Act, or a variation of such Program, that will facilitate the completion of such a redevelopment project. (4)

Report

(A)

In general

Not later than the date determined under subparagraph (B), the Commission shall submit a report to the Secretary and the Congress that— (i)evaluates and makes recommendations regarding whether there is a need for a Federal terrorism risk insurance program and, if so, makes a specific, detailed recommendation for the replacement of the Program, including specific, detailed recommendations for the creation of a terrorism reinsurance facility or facilities or single or multiple pooling arrangements, or both; and (ii)includes the evaluation, determination, and any recommendation required under paragraph (3). (B)

Timing

The date determined under this subparagraph is— (i)except as provided in clause (ii), the date that occurs 6 months after the date of the enactment of this Act; or (ii)the date of such termination of the Program (as so extended), if, before the the date under clause (i), the date of the termination of the Program under this Act is extended to a date that occurs after such date under clause (i) .

Extension of program to provide for redevelopment of previous terrorism sites

Section 108(a) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended— (1)by striking (a) Termination of program.—The Program and inserting the following:

(a)

Termination of program

(1)

In general

Except as provided in paragraph (2), the Program

; and

(2)by adding at the end the following new paragraphs:

(2)

Extension of program to provide for redevelopment of previous terrorism sites

If the Commission determines in the report submitted to the Secretary pursuant to section 109(c)(4) that the market will not provide for renewal of, or generation of new, insurance contracts necessary to permit redevelopment at the site of a previous act of terrorism, the Program shall remain in effect as provided under paragraph (3) and the Secretary shall immediately take such action as may be necessary to extend the Program in accordance with paragraph (3) and the recommendations of the Commission set forth in such report. (3)

Scope of extended program

If the Program is extended pursuant to paragraph (2), the Program— (A)shall provide coverage, during such extension, only with respect to insured losses under property and casualty insurance coverage (including builder’s risk policies) as the Secretary determines is appropriate and in accordance with the recommendations in the report of the Commission under section 109(c)(4), to permit redevelopment at the site of a previous act or terrorism; and (B)shall remain in effect as provided under subparagraph (A) only with respect to any contracts for such property and casualty insurance in connection with such redevelopment that are issued on or before December 31, 2008.