[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 467 Reported in Senate (RS)]







                                                       Calendar No. 287
109th CONGRESS
  1st Session
                                 S. 467

  To extend the applicability of the Terrorism Risk Insurance Act of 
                                 2002.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 18, 2005

    Mr. Dodd (for himself, Mr. Bennett, Mr. Schumer, Mr. Hagel, Mr. 
Corzine, Mr. Bunning, Mr. Reed, Mr. Lugar, Mrs. Clinton, Mr. Nelson of 
  Nebraska, Mr. Carper, Mrs. Dole, Mr. Chambliss, Mr. Lautenberg, Mr. 
Bayh, Ms. Stabenow, Mr. Chafee, Mr. Lieberman, Mr. Salazar, Mr. Obama, 
 Mr. Kerry, Mr. Allen, Mr. Durbin, Mr. Coleman, Mrs. Murray, Mr. Reid, 
Mr. Dayton, Mr. Byrd, Mr. Conrad, Mr. Smith, Mr. Bingaman, Mr. Johnson, 
 Mr. Kennedy, and Mr. Talent) introduced the following bill; which was 
read twice and referred to the Committee on Banking, Housing, and Urban 
                                Affairs

                           November 16, 2005

               Reported by Mr. Shelby, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
  To extend the applicability of the Terrorism Risk Insurance Act of 
                                 2002.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Terrorism Risk Insurance 
Extension Act of 2005.''.</DELETED>

<DELETED>SEC. 2. EXTENSION OF TERRORISM RISK INSURANCE 
              PROGRAM.</DELETED>

<DELETED>    (a) Extension of Program Years.--Section 108(a) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 
2336) is amended by striking ``2005'' and inserting ``2007''.</DELETED>
<DELETED>    (b) Continuing Authority of the Secretary.--Section 108(b) 
of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 
Stat. 2336) is amended by striking ``arising out of'' and all that 
follows through ``this title''.</DELETED>

<DELETED>SEC. 3. CONFORMING AMENDMENTS.</DELETED>

<DELETED>    (a) Definitions.--</DELETED>
        <DELETED>    (1) Program years.--Section 102(11) of the 
        Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 
        Stat. 2326) is amended by adding at the end the 
        following:</DELETED>
                <DELETED>    ``(E) Program year 4.--The term `Program 
                Year 4' means the period beginning on January 1, 2006 
                and ending on December 31, 2006.</DELETED>
                <DELETED>    ``(F) Program year 5.--The term `Program 
                Year 5' means the period beginning on January 1, 2007 
                and ending on December 31, 2007.</DELETED>
                <DELETED>    ``(G) Other program years.--Except when 
                used as provided in subparagraphs (B) through (F), the 
                term `Program Year' means, as the context requires, any 
                of Program Year 1, Program Year 2, Program Year 3, 
                Program Year 4, or Program Year 5.''.</DELETED>
        <DELETED>    (2) Insured losses.--Section 102(5) of the 
        Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 
        Stat. 2324) is amended--</DELETED>
                <DELETED>    (A) by inserting ``on or before December 
                31, 2007, as required by this title,'' before ``if such 
                loss'';</DELETED>
                <DELETED>    (B) by striking ``(A) occurs within'' and 
                inserting the following:</DELETED>
                <DELETED>    ``(A) occurs on or before the earlier of 
                the expiration date of the insurance policy or December 
                31, 2008; and</DELETED>
                <DELETED>    ``(B) occurs--</DELETED>
                        <DELETED>    ``(i) within''; and</DELETED>
                <DELETED>    (C) by striking ``occurs to an air 
                carrier'' and inserting the following:</DELETED>
                        <DELETED>    ``(ii) to an air 
                        carrier''.</DELETED>
        <DELETED>    (3) Conforming amendments.--Section 102 of the 
        Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 
        Stat. 2323) is amended--</DELETED>
                <DELETED>    (A) in paragraph (1)(A)(iii)(I), by 
                striking ``(5)(B)'' and inserting ``(5)(B)(ii)''; 
                and</DELETED>
                <DELETED>    (B) in paragraph (4), by striking 
                ``subparagraphs (A) and (B)'' and inserting 
                ``subparagraph (B)''.</DELETED>
<DELETED>    (b) Applicable Insurer Deductibles.--Section 102(7) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 
2325) is amended--</DELETED>
        <DELETED>    (1) in subparagraph (D)--</DELETED>
                <DELETED>    (A) by inserting ``and each Program Year 
                thereafter'' before ``, the value''; and</DELETED>
                <DELETED>    (B) by striking ``preceding Program Year 
                3'' and inserting ``preceding that Program Year''; 
                and</DELETED>
        <DELETED>    (2) in subparagraph (E), by striking ``for the 
        Transition'' and all that follows through ``Program Year 3'' 
        and inserting the following: ``for the Transition Period or any 
        Program Year''.</DELETED>
<DELETED>    (c) Continuation of Mandatory Availability.--Section 
103(c)(1) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 
note, 116 Stat. 2327) is amended--</DELETED>
        <DELETED>    (1) by striking ``last day of Program Year 2'' and 
        inserting ``termination date established under section 
        108(a)''; and</DELETED>
        <DELETED>    (2) by striking the paragraph heading and 
        inserting ``In general.--''.</DELETED>
<DELETED>    (d) Duration of Policies.--Section 103(c) of the Terrorism 
Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 2327) is 
amended--</DELETED>
        <DELETED>    (1) by redesignating paragraph (2) as paragraph 
        (3); and</DELETED>
        <DELETED>    (2) by inserting after paragraph (1) the 
        following:</DELETED>
        <DELETED>    ``(2) Mandatory duration.--Coverage for insured 
        losses required by paragraph (1) under a policy issued at any 
        time during Program Year 5 shall remain in effect for not less 
        than 1 year following the date of issuance of the policy, 
        except that no loss occurring after the earlier of the 
        expiration date of the subject insurance policy or December 31, 
        2008, shall be considered to be an insured loss for purposes of 
        this title.''.</DELETED>
<DELETED>    (e) Insured Loss Shared Compensation.--Section 103(e) of 
the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 
Stat. 2328) is amended--</DELETED>
        <DELETED>    (1) in paragraph (2)(A), by striking ``ending on'' 
        and all that follows through ``Program Year 3'' and inserting 
        ``ending on the termination date established under section 
        108(a)''; and</DELETED>
        <DELETED>    (2) in paragraph (3), by striking ``ending on'' 
        and all that follows through ``Program Year 3'' and inserting 
        ``ending on the termination date established under section 
        108(a)''.</DELETED>
<DELETED>    (f) Aggregate Retention Amount.--Section 103(e)(6) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 
2328) is amended--</DELETED>
        <DELETED>    (1) in subparagraph (B), by striking ``and'' at 
        the end;</DELETED>
        <DELETED>    (2) in subparagraph (C), by striking the period at 
        the end and inserting a semicolon; and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
                <DELETED>    ``(D) for Program Year 4, the lesser of--
                </DELETED>
                        <DELETED>    ``(i) $17,500,000,000; 
                        and</DELETED>
                        <DELETED>    ``(ii) the aggregate amount, for 
                        all insurers, of insured losses during such 
                        Program Year; and</DELETED>
                <DELETED>    ``(E) for Program Year 5, the lesser of--
                </DELETED>
                        <DELETED>    ``(i) $20,000,000,000; 
                        and</DELETED>
                        <DELETED>    ``(ii) the aggregate amount, for 
                        all insurers, of insured losses during such 
                        Program Year.''.</DELETED>

<DELETED>SEC. 4. COVERAGE OF GROUP LIFE INSURANCE.</DELETED>

<DELETED>    Section 103 of the Terrorism Risk Insurance Act of 2002 
(15 U.S.C. 6701 note, 116 Stat. 2327) is amended by striking subsection 
(h) and inserting the following:</DELETED>
<DELETED>    ``(h) Applicability to Group Life Insurance.--</DELETED>
        <DELETED>    ``(1) In general.--The Secretary shall, by rule, 
        apply the provisions of this title to providers of group life 
        insurance, in the manner determined appropriate by the 
        Secretary, consistent with the purposes of this 
        title.</DELETED>
        <DELETED>    ``(2) Consistent application.--The rules of the 
        Secretary under this subsection shall, to the extent 
        practicable, apply the provisions of this title to providers of 
        group life insurance in a similar manner as those provisions 
        apply to an insurer otherwise under this title.</DELETED>
        <DELETED>    ``(3) Considerations.--In determining the 
        applicability of this title to providers of group life 
        insurance, and the manner of such application, the Secretary 
        shall consider the overall group life insurance market size, 
        and shall consider the establishment of separate retention 
        amounts for such providers.</DELETED>
        <DELETED>    ``(4) Rulemaking required.--Not later than 90 days 
        after the date of enactment of the Terrorism Risk Insurance 
        Extension Act of 2005, the Secretary shall issue final 
        regulations to carry out this subsection.</DELETED>
        <DELETED>    ``(5) Rule of construction.--Nothing in this 
        subsection may be construed to affect or otherwise alter the 
        applicability of this title to any insurer, as defined in 
        section 102.</DELETED>
        <DELETED>    ``(6) Definition.--As used in this subsection, the 
        term `group life insurance' means an insurance contract that 
        provides term life insurance coverage, accidental death 
        coverage, or a combination thereof, for a number of persons 
        under a single contract, on the basis of a group selection of 
        risks.''.</DELETED>

<DELETED>SEC. 5. RECOMMENDATIONS FOR LONG-TERM SOLUTIONS.</DELETED>

<DELETED>    Section 108 of the Terrorism Risk Insurance Act of 2002 
(15 U.S.C. 6701 note, 116 Stat. 2328) is amended by adding at the end 
the following:</DELETED>
<DELETED>    ``(e) Recommendations for Long-Term Solutions.--The 
Presidential Working Group on Financial Markets shall, in consultation 
with the NAIC, representatives of the insurance industry, and 
representatives of policy holders, not later than June 30, 2006, submit 
a report to Congress containing recommendations for legislation to 
address the long-term availability and affordability of insurance for 
terrorism risk.''.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Terrorism Risk Insurance Extension 
Act of 2005''.

SEC. 2. EXTENSION OF TERRORISM RISK INSURANCE PROGRAM.

    (a) Program Extension.--Section 108(a) of the Terrorism Risk 
Insurance Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 2336) is amended 
by striking ``2005'' and inserting ``2007''.
    (b) Mandatory Availability.--Section 103(c) of the Terrorism Risk 
Insurance Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 2327) is 
amended--
            (1) by striking paragraph (2);
            (2) by striking ``Availability.--'' and all that follows 
        through ``each entity'' and inserting ``Availability.--During 
        each Program Year, each entity''; and
            (3) by redesignating subparagraphs (A) and (B) as 
        paragraphs (1) and (2), respectively, and moving the margins 2 
        ems to the left.

SEC. 3. AMENDMENTS TO DEFINED TERMS.

    (a) Covered Acts of Terrorism.--Section 102(1)(B)(ii) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 
2324) is amended by inserting before the period ``, with respect to an 
act occurring before Program Year 4, $50,000,000 with respect to an act 
occurring in Program Year 4, or $100,000,000 with respect to an act 
occurring in Program Year 5''.
    (b) Program Years.--Section 102(11) of the Terrorism Risk Insurance 
Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 2326) is amended by adding 
at the end the following:
                    ``(E) Program year 4.--The term `Program Year 4' 
                means the period beginning on January 1, 2006 and 
                ending on December 31, 2006.
                    ``(F) Program year 5.--The term `Program Year 5' 
                means the period beginning on January 1, 2007 and 
                ending on December 31, 2007.''.
    (c) Exclusions From Covered Lines.--
            (1) In general.--Section 102(12)(B) of the Terrorism Risk 
        Insurance Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 2326) is 
        amended--
                    (A) in clause (vi), by striking ``or'' at the end;
                    (B) in clause (vii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
                            ``(viii) commercial automobile insurance;
                            ``(ix) burglary and theft insurance;
                            ``(x) surety insurance;
                            ``(xi) professional liability insurance; or
                            ``(xii) farm owners multiple peril 
                        insurance.''.
            (2) Conforming amendments.--Section 102(12)(A) of the 
        Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note; 116 
        Stat. 2326) is amended--
                    (A) by striking ``, and surety insurance''; and
                    (B) by striking ``, worker's'' and inserting ``and 
                worker's''.
    (d) Insurer Deductibles.--Section 102(7) of the Terrorism Risk 
Insurance Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 2325) is 
amended--
            (1) in subparagraph (D), by striking ``and'' at the end;
            (2) by redesignating subparagraph (E) as subparagraph (G);
            (3) by inserting after subparagraph (D), the following:
                    ``(E) for Program Year 4, the value of an insurer's 
                direct earned premiums over the calendar year 
                immediately preceding Program Year 4, multiplied by 
                17.5 percent;
                    ``(F) for Program Year 5, the value of an insurer's 
                direct earned premiums over the calendar year 
                immediately preceding Program Year 5, multiplied by 20 
                percent; and''; and
            (4) in subparagraph (G), as so redesignated, by striking 
        ``through (D)'' and all that follows through ``Year 3''and 
        inserting the following: ``through (F), for the Transition 
        Period or any Program Year''.

SEC. 4. INSURED LOSS SHARED COMPENSATION.

    Section 103(e) of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note; 116 Stat. 2328) is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``through Program Year 4'' before 
                ``shall be equal''; and
                    (B) by inserting ``, and during Program Year 5 
                shall be equal to 85 percent,'' after ``90 percent''; 
                and
            (2) in each of paragraphs (2) and (3), by striking 
        ``Program Year 2 or Program Year 3'' each place that term 
        appears and inserting ``any of Program Years 2 through 5''.

SEC. 5. AGGREGATE RETENTION AMOUNTS AND RECOUPMENT OF FEDERAL SHARE.

    (a) Aggregate Retention Amounts.--Section 103(e)(6) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 
2329) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(D) for Program Year 4, the lesser of--
                            ``(i) $17,500,000,000; and
                            ``(ii) the aggregate amount, for all 
                        insurers, of insured losses during such Program 
                        Year; and
                    ``(E) for Program Year 5, the lesser of--
                            ``(i) $20,000,000,000; and
                            ``(ii) the aggregate amount, for all 
                        insurers, of insured losses during such Program 
                        Year.''.
    (b) Recoupment of Federal Share.--Section 103(e)(7) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note; 116 Stat. 
2329) is amended--
            (1) in subparagraph (A), by striking ``, (B), and (C)'' and 
        inserting ``through (E)''; and
            (2) in each of subparagraphs (B) and (C), by striking 
        ``subparagraph (A), (B), or (C)'' each place that term appears 
        and inserting ``any of subparagraphs (A) through (E)''.

SEC. 6. LITIGATION MANAGEMENT.

    Section 107(a) of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note; 116 Stat. 2335) is amended by adding at the end the 
following:
            ``(6) Authority of the secretary.--Procedures and 
        requirements established by the Secretary under section 50.82 
        of part 50 of title 31 of the Code of Federal Regulations (as 
        in effect on the date of issuance of that section in final 
        form) shall apply to any cause of action described in paragraph 
        (1) of this subsection.''.

SEC. 7. ANALYSIS AND REPORT ON TERRORISM RISK COVERAGE CONDITIONS AND 
              SOLUTIONS.

    Section 108 of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 
6701 note; 116 Stat. 2336) is amended by adding at the end the 
following:
    ``(e) Analysis of Market Conditions for Terrorism Risk Insurance.--
            ``(1) In general.--The President's Working Group on 
        Financial Markets, in consultation with the National 
        Association of Insurance Commissioners, representatives of the 
        insurance industry, representatives of the securities industry, 
        and representatives of policy holders, shall perform an 
        analysis regarding the long-term availability and affordability 
        of insurance for terrorism risk, including--
                    ``(A) group life coverage; and
                    ``(B) coverage for chemical, nuclear, biological, 
                and radiological events.
            ``(2) Report.--Not later than September 30, 2006, the 
        President's Working Group on Financial Markets shall submit a 
        report to the Committee on Banking, Housing, and Urban Affairs 
        of the Senate and the Committee on Financial Services of the 
        House of Representatives on its findings pursuant to the 
        analysis conducted under subsection (a).''.
                                                       Calendar No. 287

109th CONGRESS

  1st Session

                                 S. 467

_______________________________________________________________________

                                 A BILL

  To extend the applicability of the Terrorism Risk Insurance Act of 
                                 2002.

_______________________________________________________________________

                           November 16, 2005

                       Reported with an amendment