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).

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.

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.

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,.

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.

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.

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.

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

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).

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).

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.

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.

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:

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.

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.