[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2761 Introduced in House (IH)]
110th CONGRESS
1st Session
H. R. 2761
To extend the Terrorism Insurance Program of the Department of the
Treasury, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 18, 2007
Mr. Capuano (for himself, Mrs. Maloney of New York, Mr. Ackerman, Mr.
Meeks of New York, Mrs. McCarthy of New York, Mr. Crowley, Mr. Israel,
Mr. King of New York, Mr. Gutierrez, Mr. Watt, Mr. Sherman, Mr. Lynch,
Mr. Scott of Georgia, Mr. Al Green of Texas, Mr. Cleaver, Mr. Lincoln
Davis of Tennessee, Mr. Sires, Mr. Mahoney of Florida, Mr. Murphy of
Connecticut, Mr. Wexler, Mr. Boren, Mr. Frank of Massachusetts, Mr.
Hodes, and Mr. Shays) introduced the following bill; which was referred
to the Committee on Financial Services
_______________________________________________________________________
A BILL
To extend the Terrorism Insurance Program of the Department of the
Treasury, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the ``Terrorism Risk
Insurance Revision and Extension Act of 2007''.
(b) References.--Except as otherwise expressly provided in this
Act, wherever in this Act an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note).
SEC. 2. FINDINGS AND PURPOSE.
Section 101 is amended--
(1) in subsection (a)--
(A) in paragraph (5), by striking ``and'' at the
end;
(B) by redesignating paragraph (6) as paragraph
(12); and
(C) by inserting after paragraph (5) the following
new paragraphs:
``(6) the United States Government should coordinate with
insurers to provide financial compensation to insured parties
for losses from acts of terrorism, contributing to the
stabilization of the United States economy in a time of
national crisis, and periodically assess the ability of the
financial services industry to develop the systems, mechanisms,
products, and programs necessary to create a viable financial
services market for private terrorism risk insurance that will
lessen the financial participation of the United States
Government;
``(7) in addition to a terrorist attack on the United
States using conventional means or weapons, there is and
continues to be a potential threat of a terrorist attack
involving the use of unconventional means or weapons, such as
nuclear, biological, chemical, or radiological agents;
``(8) as nuclear, biological, chemical or radiological acts
of terrorism (known as NBCR terrorism) present a threat of loss
of life, injury, disease and property damage potentially
unparalleled in scope and complexity by any prior event,
natural or man-made, the Federal Government's responsibility in
providing for and preserving national economic security calls
for a strong Federal role in ensuring financial compensation
and economic recovery in the event of such an attack;
``(9) a report issued by the Government Accountability
Office in September 2006 concluded that `any purely market-
driven expansion of coverage' for NBCR terrorism risk is
`highly unlikely in the foreseeable future' and the September
2006 report from the President's Working Group on Financial
Markets concluded that reinsurance for NBCR terrorist events is
virtually unavailable and that `[g]iven the general reluctance
of insurance companies to provide coverage for these types of
risks, there may be little potential for future market
development';
``(10) group life insurance companies are important
financial institutions whose products make life insurance
coverage affordable for millions of Americans and often serve
as their only life insurance benefit;
``(11) the group life insurance industry, in the event of a
severe act of terrorism, is vulnerable to insolvency because
high concentrations of covered employees work in the same
locations, because primary life insurers do not exclude
conventional and NBCR terrorism risks while most catastrophic
reinsurance does exclude such terrorism risks, and because a
large-scale loss of life would fall outside of actuarial
expectations of death; and''; and
(2) in subsection (b)--
(A) in paragraph (1), by striking ``for terrorism
risk'' and inserting the following: ``and group life
insurance for all types of terrorism risk, including
conventional terrorism risk and nuclear, biological,
chemical, and radiological terrorism risk''; and
(B) in paragraph (2)--
(i) by inserting before the period at the
end the following: ``(unless otherwise
preempted by this Act)''; and
(ii) by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following new
paragraph:
``(3) provide finite liability limits for terrorism
insurance losses for insurers and the United States
Government.''.
SEC. 3. 10-YEAR EXTENSION OF PROGRAM.
(a) Termination Date.--Section 108(a) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2017''.
(b) Additional Program Year.--Paragraph (11) of section 102 is
amended by adding at the end the following new subparagraph:
``(G) Additional program year.--The term
`additional Program Year' means any additional one-year
period after Program Year 5 during which the Program is
in effect, which period shall begin on January 1 and
end on December 31 of the same calendar year.''.
(c) Insurer Deductible.--Section 102(7) is amended--
(1) in subparagraph (F), by striking ``and'' at the end;
and
(2) in subparagraph (G)--
(A) by striking ``(F)'' and inserting ``(G)''; and
(B) by redesignating such subparagraph as
subparagraph (H); and
(3) by inserting after subparagraph (F) the following:
``(G) for each additional Program Year--
``(i) with respect to property and casualty
insurance, the value of an insurer's direct
earned premiums over the calendar year
immediately preceding such Program Year,
multiplied by 20 percent; and''.
(d) Insured Loss Shared Compensation.--Subsection (e) of section
103 is amended--
(1) in paragraph (2)(A), by striking ``the period'' and all
that follows through ``2 through 5'' and inserting ``any
additional Program Year'';
(2) in paragraph (6)--
(A) in subparagraph (D), by striking ``and'' at the
end;
(B) in subparagraph (E), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(F) for each additional Program Year--
``(i) for property and casualty insurance,
the lesser of--
``(I) $27,500,000,000; and
``(II) the aggregate amount, for
all such insurance, of insured losses
during such Program Year; and''; and
(3) in paragraph (7), by striking ``period'' and
``periods'' each place either such term appears and inserting
``Program Year'' and ``Program Years'', respectively.
SEC. 4. COVERAGE OF DOMESTIC TERRORISM.
Clause (iv) of section 102(1)(A) is amended by striking ``acting on
behalf of any foreign person or foreign interest,''.
SEC. 5. ADJUSTMENT OF PROGRAM TRIGGER.
Section 103(e)(1) is amended--
(1) in subparagraph (B), by striking clauses (i) and (ii)
and inserting the following new clause:
``(i) $50,000,000, with respect to such
insured losses occurring in any additional
Program Year; or''; and
(2) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively.
SEC. 6. DEFINITIONS.
Section 102 is amended--
(1) in paragraph (3)(C), by inserting before the period at
the end the following: ``; except that for purposes of any
proceeding under this subparagraph, there shall be a
presumption that any entity which directly or indirectly owns,
controls, or has power to vote less than 5 percent of any class
of voting securities of another entity does not have control
over that entity'';
(2) in paragraph (4), by striking ``paragraph (5)'' and
inserting ``paragraph (8)'';
(3) by redesignating paragraphs (10) through (16) as
paragraphs (15) through (21), respectively;
(4) by inserting after paragraph (9) the following new
paragraph:
``(14) Previously impacted area.--
``(A) In general.--The term `impacted area' means a
geographic area that, after an act of terrorism, the
Secretary determines has suffered a substantial and
direct economic impact as a result of such act of
terrorism. In designating such an area the Secretary
shall use postal zip codes, census tracts, or such
other geographic determinates as the Secretary finds
appropriate to provide a clear delineation of the
impacted area.
``(B) Previous acts of terrorism.--Notwithstanding
subparagraph (A), the Secretary shall designate as an
impacted area any area within the United States that
has, during the 15-year period ending upon the date of
the enactment of the Terrorism Risk Insurance Revision
and Extension Act of 2007, been subject to an act of
violence that--
``(i) would have been an act of terrorism
for purposes of this Act if this Act had been
in effect at the time of such act of violence;
and
``(ii) resulted in insured losses (as such
term is defined in this Act) of at least
$1,000,000,000 at the time of the event.
Any such previous acts of violence shall be considered
acts of terrorism for purposes of paragraph (11) of
this section (relating to insurer deductible) and
section 103(e)(1)(C) (relating to program trigger).'';
(5) by redesignating paragraph (9) as paragraph (13);
(6) by inserting after paragraph (8) the following new
paragraph:
``(12) NBCR terrorism.--The term `NBCR terrorism' means an
act of terrorism that involves nuclear, biological, chemical,
or radiological reactions, releases, or contaminations, to the
extent any insured losses are caused by any such reactions,
releases, or contaminations.'';
(7) by redesignating paragraphs (5) through (8) as
paragraphs (8) through (11), respectively;
(8) by inserting after paragraph (4) the following new
paragraphs:
``(6) Excess insured loss.--The term `excess insured loss'
means, with respect to a Program Year, any portion of the
amount of insured losses during such Program Year that exceeds
the cap on annual liability under section 103(e)(2)(A).
``(7) Group life insurance.--The term `group life
insurance' means an insurance contract that provides life
insurance coverage, including term life insurance coverage,
group universal life insurance coverage, group variable
universal life insurance coverage and accidental death
coverage, or a combination thereof, for a number of individuals
under a single contract, on the basis of a group selection of
risks, but does not include `Corporate Owned Life Insurance' or
`Business Owned Life Insurance,' each as defined under the
Internal Revenue Code of 1986, or any similar product.'';
(9) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively; and
(10) by inserting after paragraph (2) the following new
paragraph.
``(3) Amount at risk.--The term `amount at risk' means,
with respect to group life insurance, the death benefit less
any cash value.''.
SEC. 7. COVERAGE OF GROUP LIFE INSURANCE.
(a) Definitions.--Section 102, as amended by the preceding
provisions of this Act, is further amended--
(1) in paragraph (1)(B)(ii), by inserting ``and group life
insurance'' before ``losses'';
(2) in paragraph (8) (relating to insured loss), as so
redesignated by section 6 of this Act, in the matter preceding
subparagraph (A)--
(A) by inserting ``or group life insurance as
limited to the amount at risk,'' after ``property and
casualty insurance''; and
(B) by inserting a comma after ``insurer'';
(3) in paragraph (9) (relating to insurer), as so
redesignated by section 6 of this Act--
(A) in subparagraph (A)(i), by inserting ``, or
group life insurance,'' after ``excess insurance''; and
(B) in subparagraph (B), by inserting ``or, in the
case of group life insurance, that receives premiums,''
after ``insurance coverage,'';
(4) in paragraph (10) (relating to insurer deductible), as
so redesignated by section 6 of this Act--
(A) in subparagraph (G), as added by section
3(c)(3) of this Act, by adding at the end the following
new clause:
``(ii) with respect to group life
insurance, the value of an insurer's amount at
risk for a covered line of insurance over the
calendar year immediately preceding such
Program Year, multiplied by 0.0351 percent;'';
and
(B) in subparagraph (H), as so redesignated by
section 3(c)(2) of this Act--
(i) by inserting ``for property and
casualty insurance, and such portion of the
amount at risk for group life insurance,''
after ``such portion of the direct earned
premiums''; and
(ii) by striking the period at the end and
inserting ``and amount at risk;''.
(b) Separate Retention Pool.--Section 103(e)(6) is amended--
(1) in subparagraph (D)(ii), by striking ``and'' at the
end; and
(2) in subparagraph (F), as added by section 3(d)(2)(C) of
this Act, by adding at the end the following new clause:
``(ii) for group life insurance, the lesser
of--
``(I) $5,000,000,000; and
``(II) the aggregate amount, for
all such insurance, of insured losses
during such Program Year.''.
(c) Separate Recoupment.--Section 103(e)(7) is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by striking
``(E)'' and inserting ``(F)'';
(B) in clause (i), by inserting ``applicable''
before ``insurance'';
(C) in clause (ii), by striking ``all insurers''
and inserting ``all applicable insurers (pursuant to
subparagraph (E))'';
(2) in subparagraph (B)--
(A) in the heading, by inserting ``applicable''
before ``insurance'';
(B) by striking ``(E)'' and inserting ``(F)''; and
(C) by inserting ``applicable'' before
``insurance'';
(3) in subparagraph (C), by striking ``(E)'' and inserting
``(F)''; and
(4) by adding at the end the following new subparagraph:
``(E) Separate recoupment.--``The Secretary shall
provide that--
``(i) any recoupment under this paragraph
of amounts paid for Federal financial
assistance for insured losses for property and
casualty insurance shall be made from an
insurer, with respect to its property and
casualty insurance; and
``(ii) any recoupment under this paragraph
of amounts paid for Federal financial
assistance for insured losses for group life
insurance shall be made from an insurer, with
respect to its group life insurance.''.
(d) Policy Surcharge for Terrorism Loss Risk-Spreading Premiums.--
Section 103(e)(8) is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by striking
``Any'' and inserting ``Subject to subparagraph (E),
any'';
(B) in clause (i), by inserting ``, and group life
insurance policies,'' after ``policies''; and
(C) by striking clause (iii) and inserting the
following new clause:
``(iii) be based on--
``(I) a percentage of the premium
amount charged for property and
casualty insurance coverage under the
policy; and
``(II) a percentage of the amount
at risk for covered lines of group life
insurance coverage under the policy.'';
and
(2) in subparagraph (C)--
(A) by striking the comma after ``an annual basis''
and all that follows through the end of the
subparagraph and inserting a 2-em dash; and
(B) by adding at the end the following:
``(i) with respect to property and casualty
insurance, the amount equal to 3 percent of the
premium charged under the policy; and
``(ii) with respect to group life
insurance, the amount equal to 0.0053 percent
of the amount at risk for covered lines under
the policy.''.
SEC. 8. COVERAGE FOR NUCLEAR, BIOLOGICAL, CHEMICAL, AND RADIOLOGICAL
EVENTS.
(a) Certification.--Section 102(1) is amended--
(1) in subparagraph (C), by inserting ``or as an act of
NBCR terrorism'' after ``act of terrorism'';
(2) in subparagraph (D), by inserting ``, including an act
of NBCR terrorism,'' after ``act of terrorism'';
(3) by redesignating subparagraphs (C) and (D) as
subparagraphs (D) and (E), respectively; and
(4) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Certification of acts of nbcr terrorism.--
Upon certification of an act of terrorism, the
Secretary, in concurrence with the Secretary of State,
and the Attorney General of the United States, shall
determine whether the act of terrorism meets the
definition of NBCR terrorism in this section. If such
determination is that the act does meet such
definition, the Secretary shall specifically certify
such act as an act of NBCR terrorism.''.
(b) Mandatory Availability.--Section 103(c) is amended--
(1) in paragraph (1)--
(A) by striking ``property and casualty insurance
policies'' and inserting ``insurance policies for
covered lines''; and
(B) by striking ``; and'' and inserting the
following: ``, except for losses resulting from an act
of NBCR terrorism;'';
(2) in paragraph (2)--
(A) by striking ``property and casualty'' and
inserting ``, for covered lines,'';
(B) by striking the period at the end and inserting
a semicolon; and
(3) by adding after paragraph (2) the following new
paragraph:
``(3) shall make available, to any person who elects
coverage under paragraph (1) for a covered line and
notwithstanding any nuclear hazard or pollution exclusion in a
policy that otherwise would be applicable, coverage for such
covered line for losses resulting from NBCR terrorism; and''.
(c) Insurer Deductible.--Paragraph (10) of section 102, as so
redesignated by the preceding provisions of this Act, is amended by
adding at the end the following new subparagraph:
``(I) notwithstanding subparagraphs (A) through
(H), in the case of any act of NBCR terrorism, for any
additional Program Year--
``(i) with respect to property and casualty
insurance, the value of an insurer's direct
earned premiums over the calendar year
immediately preceding such Program Year,
multiplied by 7.5 percent; and
``(ii) with respect to group life
insurance, the value of an insurer's amount at
risk for a covered line of insurance over the
calendar year immediately preceding such
Program Year, multiplied by 0.0132 percent;
and''.
(d) Rate and Form Filings.--Section 106(a)(2) is amended--
(1) in subparagraph (B), by striking ``and'' at the end;
(2) by redesignating subparagraph (C) as subparagraph (D);
and
(3) by inserting after subparagraph (B) the following new
subparagraph:
``(C) during the period beginning on the date of
the enactment of the Terrorism Risk Insurance Revision
and Extension Act of 2007 and ending on December 31,
2008, rates and forms for property and casualty
insurance covered by this title and providing coverage
for NBCR terrorism that are filed with any State shall
not be subject to prior approval or a waiting period
under any law of a State that would otherwise be
applicable, except that nothing in this title affects
the ability of any State to invalidate a rate as
excessive, inadequate, or unfairly discriminatory, and,
with respect to forms, where a State has prior approval
authority, it shall apply to allow subsequent review of
such forms; and''.
SEC. 9. INSURED LOSS SHARED COMPENSATION.
(a) Insurer Copayment; Federal Share of Compensation.--Section
103(e)(1) is amended by striking subparagraph (A) and inserting the
following new subparagraphs:
``(A) Conventional terrorism.--Except as provided
in subparagraph (B), the Federal share of compensation
under the Program to be paid by the Secretary for
insured losses of an insurer during any additional
Program Year shall be equal to the sum of--
``(i) 85 percent of that portion of the
amount of such insured losses that--
``(I) exceeds the applicable
insurer deductible required to be paid
during such Program Year; and
``(II) based upon pro rata
determinations pursuant to paragraph
(2)(B), does not contribute to
aggregate industry insured losses
during such Program Year exceeding
$100,000,000,000; and
``(ii) 100 percent of the insured losses of
the insurer that, based upon pro rata
determinations pursuant to paragraph (2)(B),
contributes to aggregate industry insured
losses during such Program Year exceeding
$100,000,000,000, up to the limit under
paragraph (2)(A).
``(B) NBCR terrorism.--
``(i) Amount of compensation.--The Federal
share of compensation under the Program to be
paid by the Secretary for insured losses of an
insurer resulting from NBCR terrorism during
any additional Program Year shall be equal to
the sum of--
``(I) the amount of qualified NBCR
losses (as such term is defined in
clause (ii)) of the insurer, multiplied
by a percentage based on the aggregate
industry qualified NBCR losses for the
Program Year, which percentage shall
be--
``(aa) 85 percent of such
aggregate industry qualified
NBCR losses of less than
$10,000,000,000;
``(bb) 87.5 percent of such
aggregate industry qualified
NBCR losses between
$10,000,000,000 and
$20,000,000,000;
``(cc) 90 percent of such
aggregate industry qualified
NBCR losses between
$20,000,000,000 and
$40,000,000,000;
``(dd) 92.5 percent of such
aggregate industry qualified
NBCR losses of between
$40,000,000,000 and
$60,000,000,000; and
``(ee) 95 percent of such
aggregate industry qualified
NBCR losses of more than
$60,000,000,000;
and shall be prorated per insurer based
on each insurer's percentage of the
aggregate industry qualified NBCR
losses for such additional Program
Year; and
``(II) 100 percent of the insured
losses of the insurer resulting from
NBCR terrorism that, based upon pro
rata determinations pursuant to
paragraph (2)(B), contributes to
aggregate industry insured losses
during such Program Year exceeding
$100,000,000,000, up to the limit under
paragraph (2)(A).
``(ii) Qualified nbcr losses.--For purposes
of this subparagraph, the term `qualified NBCR
losses' means, with respect to insured losses
of an insurer resulting from NBCR terrorism
during an additional Program Year, that portion
of the amount of such insured losses that--
``(I) exceeds the applicable
insurer deductible required to be paid
during such Program Year; and
``(II) based upon pro rata
determinations pursuant to paragraph
(2)(B), does not contribute to
aggregate industry insured losses
during such Program Year exceeding
$100,000,000,000.''.
(b) Cap on Annual Liability; Claims Allocations.--
(1) In general.--Section 103(e)(2) is amended--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i)--
(I) by inserting after ``State
law,'' the following: ``including any
State workers' compensation or other
compulsory insurance law,''; and
(II) by striking ``aggregate
insured losses exceed'' and inserting
``aggregate amount of the Federal share
of compensation to be paid to all
insurers pursuant to paragraph (1)(A)
exceeds'';
(ii) in clause (i), by striking ``such
losses that'' and inserting ``the aggregate
insured losses during such Program Year for
which the Federal share''; and
(iii) in clause (ii), by striking ``that
amount that'' and inserting ``the aggregate
insured losses during such Program Year for
which the Federal share''; and
(B) by adding at the end the following new
subparagraph:
``(C) Claims allocations.--The Secretary shall, by
regulation, provide for insurers to allocate claims
payments for insured losses under applicable insurance
policies in any case described in subparagraph (A).
Such regulations shall include provisions for payment,
for the purpose of addressing emergency needs of
applicable persons affected by an act of terrorism, of
a portion of claims for insured losses promptly upon
filing of such claims.''.
(2) Regulations.--The Secretary of the Treasury shall issue
the regulations referred to in the amendment made by paragraph
(1)(B), and to carry out section 103(e)(2)(B) of the Terrorism
Risk Insurance Act of 2002, not later than the expiration of
the 120-day period beginning upon the date of the enactment of
this Act.
(c) Limitation on Insurer Financial Responsibility; Notification of
Losses.--Section 103(e) is amended--
(1) by redesignating paragraphs (4) through (8) (as amended
by the preceding provisions of this Act) as paragraphs (5)
through (9), respectively; and
(2) by striking paragraph (3) and inserting the following
new paragraphs:
``(3) Limitation on insurer financial responsibility.--
``(A) Limitation.--Notwithstanding any other
provision of Federal or State law, including any State
workers' compensation or other compulsory insurance
law, an insurer's financial responsibility for insured
losses from acts of terrorism shall be limited to its
applicable insurer deductible and its applicable quota
share of insured losses determined pursuant to the
applicable provisions of section 102(10) and paragraph
(1)(A) of this subsection, respectively, and subject to
the requirements of paragraph (2)(B) of this
subsection.
``(B) Federal reimbursement.--Notwithstanding any
other provision of Federal or State law, the Secretary
shall--
``(i) reimburse insurers for any payment of
excess insured losses made prior to publication
of any notification pursuant to paragraph
(4)(A);
``(ii) reimburse insurers for any payment
of excess insured losses occurring on or after
the date of any notification pursuant to
paragraph (4)(A), but only to the extent that--
``(I) such payment is ordered by a
court pursuant to subparagraph (C) of
this paragraph or is directed by State
law, notwithstanding this paragraph, or
by Federal law;
``(II) such payment is limited to
compensating insurers for their payment
of excess insured losses and does not
include punitive damages, or litigation
or other costs; and
``(III) the insurer has made a good
faith effort to defend against any
claims for such payment; and
``(iii) have the right to intervene in any
legal proceedings relating to such claims
specified in clause (ii)(III).
``(C) Federal court jurisdiction.--
``(i) Conditions.--All claims relating to
or arising out of an insurer's financial
responsibility for insured losses from acts of
terrorism under this section shall be within
the original and exclusive jurisdiction of the
district courts of the United States, in
accordance with the procedures established in
subparagraph (D), if the Secretary certifies
that the following conditions have been met, or
that there is a reasonable likelihood that the
following conditions may be met:
``(I) The aggregate amount of the
Federal share of compensation to be
paid to all insurers pursuant to
paragraph (1)(A) exceeds
$100,000,000,000, pursuant to paragraph
(2); and
``(II) the insurer has paid its
applicable insurer deductible and its
pro rata share of insured losses
determined pursuant to paragraph
(2)(B).
``(ii) Removal of state court actions.--If
the Secretary certifies that conditions set
forth in subclauses (I) and (II) of clause (i)
have been met, all pending State court actions
that relate to or arise out of an insurer's
financial responsibility for insured losses
from acts of terrorism under this section shall
be removed to a district court of the United
States in accordance with subparagraph (D).
``(D) Venue.--For each determination made by the
Secretary pursuant to subparagraph (C)(i), not later
than 90 days after the Secretary's determination the
Judicial Panel on Multidistrict Litigation shall
designate one district court or, if necessary, multiple
district courts of the United States that shall have
original and exclusive jurisdiction over all actions
for any claim relating to or arising out of an insurers
financial responsibility for insured losses from acts
of terrorism under this section.
``(4) Notices regarding losses and annual liability cap.--
``(A) Approaching cap.--If the Secretary determines
estimated or actual aggregate Federal compensation to
be paid pursuant to paragraph (1) equals or exceeds
$80,000,000,000 during any Program Year, the Secretary
shall promptly provide notification in accordance with
subparagraph (D)--
``(i) of such estimated or actual aggregate
Federal compensation to be paid;
``(ii) of the likelihood that such
aggregate Federal compensation to be paid for
such Program Year will equal or exceed
$100,000,000,000; and
``(iii) that, pursuant to paragraph
(2)(A)(ii), insurers are not required to make
payments of excess insured losses.
``(B) Event likely to cause losses to exceed cap.--
If any act of terrorism occurs that the Secretary
determines is likely to cause estimated or actual
aggregate Federal compensation to be paid pursuant to
paragraph (1) to exceed $100,000,000,000 during any
Program Year, the Secretary shall, not later than 10
days after such act, provide notification in accordance
with subparagraph (D)--
``(i) of such estimated or actual aggregate
Federal compensation to be paid; and
``(ii) that, pursuant to paragraph
(2)(A)(ii), insurers are not required to make
payments for excess insured losses.
``(C) Exceeding of cap.--If the Secretary
determines estimated or actual aggregate Federal
compensation to be paid pursuant to paragraph (1)
equals or exceeds $100,000,000,000 during any Program
Year--
``(i) the Secretary shall promptly provide
notification in accordance with subparagraph
(D)--
``(I) of such estimated or actual
aggregate Federal compensation to be
paid; and
``(II) that, pursuant to paragraph
(2)(A)(ii), insurers are not required
to make payments for excess insured
losses unless the Congress provides for
payments for excess insured losses
pursuant to clause (ii) of this
subparagraph; and
``(ii) the Congress shall determine the
procedures for and the source of any payments
for such excess insured losses.
``(D) Parties notified.--Notification is provided
in accordance with this subparagraph only if
notification is provided--
``(i) to the Congress, in writing; and
``(ii) to insurers, by causing such notice
to be published in the Federal Register.
``(E) Determinations.--The Secretary shall make
determinations regarding estimated and actual aggregate
Federal compensation to be paid promptly after any act
of terrorism as may be necessary to comply with this
paragraph.
``(F) Mandatory disclosure for insurance
contracts.--All policies for property and casualty
insurance and group life insurance shall be deemed to
contain a provision to the effect that no insurer that
has met its applicable insurer deductible and
applicable quota share shall be obligated to pay for
any portion of excess insured loss. Notwithstanding the
preceding sentence, insurers shall include a disclosure
in their policies detailing the maximum level of
Government assistance and the applicable insurer
share.''.
(d) Conforming Amendments.--The Act is amended--
(1) in section 103(e)--
(A) in paragraph (7), as so redesignated by
subsection (c)(1) of this section, by striking
``paragraph (7)'' and inserting ``paragraph (8)'';
(B) in paragraph (8), as so redesignated by
subsection (c)(1) of this section, by striking
``paragraph (6)'' each place such term appears and
inserting ``paragraph (7)''; and
(C) in paragraph (9)(C), as so redesignated by
subsection (c)(1) of this section, by striking
``paragraph (7)(D)'' and inserting ``paragraph
(8)(D)''; and
(2) in section 108(c)(1), by striking ``paragraph (4), (5),
(6), (7), or (8)'' and inserting ``paragraph (5), (6), (7),
(8), or (9)''.
SEC. 10. POST-EVENT RESET FOR PREVIOUSLY IMPACTED AREAS.
(a) Insurer Deductibles.--Paragraph (10) of section 102, as so
redesignated by the preceding provisions of this Act, is amended by
adding at the end the following new subparagraph:
``(J) if aggregate industry insured losses arising
from an act of terrorism in a previously impacted area
exceed $1,000,000,000, the insurer deductibles
otherwise applicable under this paragraph of any
insurers that sustain insured losses arising from any
subsequent act of terrorism in the same previously
impacted area shall be reduced for the Program Year in
which such subsequent act of terrorism occurred and
each Program Year thereafter by 1 percent for each
$1,000,000,000 in aggregate industry insured losses as
a result of the previous act of terrorism in such
previously impacted area, except that no insurer
deductible for any Program Year shall be reduced below
5 percent.''.
(b) Program Trigger.--Subparagraph (C) of section 103(e)(1), as
amended by the preceding provisions of this Act and so redesignated by
section 5(2) of this Act, is further amended by adding at the end the
following new clause:
``(ii) in the case of any certified act of
terrorism in any previously impacted area, the
amount provided under clause (i), as reduced by
$10,000,000 for each $1,000,000,000 in
aggregate industry insured losses that were
sustained as a result of a previous act of
terrorism in the same impacted area, except
that in no case may such amount be reduced
below the amount specified in section
102(1)(B)(ii).''.
SEC. 11. MANDATORY AVAILABILITY OF LIFE INSURANCE THAT DOES NOT
PRECLUDE FUTURE LAWFUL TRAVEL.
Subsection (c) of section 103, as amended by the preceding
provisions of this Act, is further amended by adding at the end the
following new paragraph:
``(4) shall make available, in all of its life insurance
policies issued after the date of the enactment of the
Terrorism Risk Insurance Revision and Extension Act of 2007
under which the insured person is a citizen of the United
States or an alien lawfully admitted for permanent residence in
the United States, coverage that neither considers past, nor
precludes future, lawful foreign travel by the person insured,
and shall not decline such coverage based on past or future,
lawful foreign travel by the person insured or charge a premium
for such coverage that is excessive and not based on a good
faith actuarial analysis, except that an insurer may decline
or, upon inception or renewal of a policy, limit the amount of
coverage provided under any life insurance policy based on
plans to engage in future lawful foreign travel to occur within
12 months of such inception or renewal of the policy but only
if, at time of application--
``(A) such declination is based on, or such
limitation applies only with respect to, travel to a
foreign destination--
``(i) for which the Director of the Centers
for Disease Control and Prevention of the
Department of Health and Human Services has
issued a highest level alert or warning,
including a recommendation against non-
essential travel, due to a serious health-
related condition;
``(ii) in which there is an ongoing
military conflict involving the armed forces of
a sovereign nation other than the nation to
which the insured person is traveling; or
``(iii)(I) that the insurer has
specifically designated in the terms of the
life insurance policy at the inception of the
policy or at renewal, as applicable; and
``(II) with respect to which the insurer
has made a good faith determination that--
``(aa) a serious unlawful situation
exists which is ongoing; and
``(bb) the credibility of
information by which the insurer can
verify the death of the insured person
is compromised; and
``(B) in the case of any limitation of coverage,
such limitation is specifically stated in the terms of
the life insurance policy at the inception of the
policy or at renewal, as applicable.''.
SEC. 12. EXPEDITED RULEMAKING.
Subsection (a) of section 104 is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) in paragraph (2), by striking the period and inserting
``; and''; and
(3) by adding at the end the following new paragraph:
``(3) during the 90-day period beginning upon the
certification of any act of terrorism, to issue such
regulations as the Secretary considers necessary to carry out
this Act without regard to the notice and comment provisions of
section 553 of title 5, United States Code.''.
SEC. 13. ANALYSIS AND STUDY.
(a) Analysis of Market Conditions.--Section 108 is amended by
striking subsection (e) and inserting 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 NAIC,
representatives of the insurance industry, representatives of
the securities industry, and representatives of policyholders,
shall perform an analysis regarding the long-term availability
and affordability of insurance for terrorism risk in the
private marketplace, including coverage for--
``(A) property and casualty insurance;
``(B) group life insurance;
``(C) workers' compensation; and
``(D) nuclear, biological, chemical, and
radiological events.
``(2) Report.--The President's Working Group on Financial
Markets shall submit three reports to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate,
on its findings pursuant to the analysis conducted under
paragraph (1), as follows:
``(A) An initial report, which shall be submitted
before the expiration of the 36-month period beginning
on the date of the enactment of the Terrorism Risk
Insurance Revision and Extension Act of 2007;
``(B) A second report, which shall be submitted
before the expiration of the 72-month period beginning
on the date of the enactment of such Act.
``(C) A final report, which shall be submitted
before the expiration of the 108-month period beginning
on the date of the enactment of such Act.''.
(b) Commission on Terrorism Risk Insurance.--Title I is amended by
adding at the end the following new section:
``SEC. 109. COMMISSION ON TERRORISM RISK INSURANCE.
``(a) Establishment.--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 19 members, as
follows:
``(A) The Secretary of the Treasury or the designee
of the Secretary.
``(B) One member who is a State insurance
commissioner, designated by the NAIC.
``(C) 13 members, who shall be appointed by the
President, who shall include--
``(i) a representative of group life
insurers;
``(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;
``(ix) a representative of the reinsurance
industry;
``(x) a representative of workers'
compensation insurers;
``(xi) a representative from the commercial
mortgage-backed securities industry;
``(xii) a representative from a nationally
recognized statistical rating organization; and
``(xiii) a real estate developer.
``(D) Four members, who shall serve as liaisons to
the Congress, who shall include two members jointly
selected by the Chairman and Ranking Member of the
Committee on Financial Services of the House of
Representatives and two members jointly selected by the
Chairman and Ranking Member of the Committee on
Banking, Housing, and Urban Affairs of the Senate.
``(2) Secretary.--The Program Director of the Terrorism
Risk Insurance Act of the Department of the Treasury 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
cover such losses independently; 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
proposals aimed at improving the availability of insurance
against terrorism risk in the private marketplace.
``(3) Initial meeting.--The Commission shall hold its first
meeting during the 3-month period that begins 15 months after
the date of the enactment of this Act.
``(4) Reports.--
``(A) Contents.--The Commission shall submit two
reports to the Congress that--
``(i) evaluate and make recommendations
regarding whether there is a need for a Federal
terrorism risk insurance program;
``(ii) if so, include a specific, detailed
recommendation for the replacement of the
Program under this title; and
``(iii) include the identifications,
evaluations, and recommendations required under
paragraphs (1) and (2).
``(B) Timing.--The first report required under
subparagraph (A) shall be submitted before the
expiration of the 60-month period beginning on the date
of the enactment of the Terrorism Risk Insurance
Revision and Extension Act of 2007. The second such
report shall be submitted before the expiration of the
96-month period beginning upon such date of
enactment.''.
SEC. 14. APPLICABILITY.
The amendments made by this Act shall apply beginning on January 1,
2008. The provisions of the Terrorism Risk Insurance Act of 2002, as in
effect on the day before the date of the enactment of this Act, shall
apply through the end of December 31, 2007.
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