Revision of Terrorism Insurance Program

(a)

In general

The Terrorism Risk Insurance Act of 2002 is amended— (1)by striking sections 101, 102, and 103 and inserting the following new sections:

101.

Congressional findings and purpose

(a)

Findings

The Congress finds that— (1)the ability of businesses and individuals to obtain property and casualty insurance at reasonable and predictable prices, in order to spread the risk of both routine and catastrophic loss, is critical to economic growth, urban development, and the construction and maintenance of public and private housing, as well as to the promotion of United States exports and foreign trade in an increasingly interconnected world; (2)property and casualty insurance firms are important financial institutions, the products of which allow mutualization of risk and the efficient use of financial resources and enhance the ability of the economy to maintain stability, while responding to a variety of economic, political, environmental, and other risks with a minimum of disruption; (3)the ability of the insurance industry to cover the unprecedented financial risks presented by potential acts of terrorism in the United States can be a major factor in the recovery from terrorist attacks, while maintaining the stability of the economy; (4)widespread financial market uncertainties have arisen following the terrorist attacks of September 11, 2001, including the absence of information from which financial institutions can make statistically valid estimates of the probability and cost of future terrorist events, and therefore the size, funding, and allocation of the risk of loss caused by such acts of terrorism; (5)a decision by property and casualty insurers to deal with such uncertainties, either by terminating property and casualty coverage for losses arising from terrorist events, or by radically escalating premium coverage to compensate for risks of loss that are not readily predictable, could seriously hamper ongoing and planned construction, property acquisition, and other business projects, generate a dramatic increase in rents, and otherwise suppress economic activity; (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 group 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 (12)the United States Government should provide temporary financial compensation to insured parties, contributing to the stabilization of the United States economy in a time of national crisis, while the financial services industry develops the systems, mechanisms, products, and programs necessary to create a viable financial services market for private terrorism risk insurance. (b)

Purpose

The purpose of this title is to establish a temporary Federal program that provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism, in order to— (1)protect consumers by addressing market disruptions and ensure the continued widespread availability and affordability of property and casualty insurance and group life insurance for all types of terrorism risk, including conventional terrorism risk and nuclear, biological, chemical, and radiological terrorism risk; (2)allow for a transitional period for the private markets to stabilize, resume pricing of such insurance, and build capacity to absorb any future losses, while preserving State insurance regulation and consumer protections (unless otherwise preempted by this Act); and (3)provide finite liability limits for terrorism insurance losses for insurers and the United States Government.

102.

Definitions

In this title, the following definitions shall apply: (1)

Act of terrorism

(A)

Certification

The term act of terrorism means any act that is certified by the Secretary, in concurrence with the Secretary of State, the Secretary of Homeland Security, and the Attorney General of the United States— (i)to be an act of terrorism; (ii)to be a violent act or an act that is dangerous to— (I)human life; (II)property; or (III)infrastructure; (iii)to have resulted in damage within the United States, or outside of the United States in the case of— (I)an air carrier or vessel described in paragraph (9)(B); or (II)the premises of a United States mission; and (iv)to have been committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. (B)

Limitation

No act shall be certified by the Secretary as an act of terrorism if— (i)the act is committed as part of the course of a war declared by the Congress, except that this clause shall not apply with respect to any coverage for workers' compensation; or (ii)property and casualty insurance and group life insurance losses resulting from the act, in the aggregate, do not exceed $5,000,000. (C)

Certification of act of NBCR terrorism

Where a certified act of terrorism is carried out by means of a nuclear, biological, chemical, or radiological weapon or similar instrumentality, the Secretary shall further certify such act of terrorism as an act of NBCR terrorism. If a certified act of terrorism involves any other weapon or instrumentality, the Secretary, in concurrence with the Secretary of State, the Secretary of Homeland Security, 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 further certify that such act as an act of NBCR terrorism. Nothing in this subparagraph shall prohibit the Secretary from determining that a single act of terrorism resulted in both NBCR and non-NBCR insured losses. (D)

Determinations final

Any certification of, or determination not to certify, an act as an act of terrorism or as an act of NBCR terrorism under this paragraph shall be final, and shall not be subject to judicial review. (E)

Nondelegation

The Secretary may not delegate or designate to any other officer, employee, or person, any determination under this paragraph of whether, during the effective period of the Program, an act of terrorism, including an act of NBCR terrorism, has occurred. (F)

Compensation subject to further congressional action

Notwithstanding any certification of an act under this paragraph as an act of terrorism or an act of NBCR terrorism, Federal compensation under the Program shall be subject to the provisions of section 103(h). (G)

Submission of certification under this paragraph

Upon any certification under subparagraph (A), the Secretary shall submit such certification to the Congress. (2)

Affiliate

The term affiliate means, with respect to an insurer, any entity that controls, is controlled by, or is under common control with the insurer. (3)

Amount at risk

The term amount at risk means face amount less statutory policy reserves for group life insurance issued by any insurer for insurance against losses occurring at the locations described in subparagraph (A) of paragraph (9). (4)

Control

An entity has control over another entity, if— (A)the entity directly or indirectly or acting through 1 or more other persons owns, controls, or has power to vote 25 percent or more of any class of voting securities of the other entity; (B)the entity controls in any manner the election of a majority of the directors or trustees of the other entity; or (C)the Secretary determines, after notice and opportunity for hearing, that the entity directly or indirectly exercises a controlling influence over the management or policies of the other entity; 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. (5)

Covered lines

The term covered lines means property and casualty insurance and group life insurance, as defined in this section. (6)

Direct earned premium

The term direct earned premium means a direct earned premium for property and casualty insurance issued by any insurer for insurance against losses occurring at the locations described in subparagraph (A) of paragraph (9). (7)

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). (8)

Group life insurance

The term group life insurance means an insurance contract that provides life insurance coverage, including term life insurance coverage, universal life insurance coverage, 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, or group life reinsurance or retrocessional reinsurance. (9)

Insured loss

(A)

In general

Except as provided in subparagraph (B), the term insured loss means any loss resulting from an act of terrorism (including an act of war, in the case of workers' compensation) that is covered by primary or excess property and casualty insurance, or group life insurance to the extent of the amount at risk, issued by an insurer, if such loss— (i)occurs within the United States; or (ii)occurs to an air carrier (as defined in section 40102 of title 49, United States Code), to a United States flag vessel (or a vessel based principally in the United States, on which United States income tax is paid and whose insurance coverage is subject to regulation in the United States), regardless of where the loss occurs, or at the premises of any United States mission. (B)

Limitation for group life insurance

Such term shall not include any losses of an insurer resulting from coverage of any single certificate holder under any group life insurance coverages of the insurer to the extent such losses are not compensated under the Program by reason of section 103(e)(1)(D). (10)

Insurer

The term insurer means any entity, including any affiliate thereof— (A)that is— (i)licensed or admitted to engage in the business of providing primary or excess insurance, or group life insurance, in any State; (ii)not licensed or admitted as described in clause (i), if it is an eligible surplus line carrier listed on the Quarterly Listing of Alien Insurers of the NAIC, or any successor thereto; (iii)approved for the purpose of offering property and casualty insurance by a Federal agency in connection with maritime, energy, or aviation activity; (iv)a State residual market insurance entity or State workers' compensation fund; or (v)any other entity described in section 103(f), to the extent provided in the rules of the Secretary issued under section 103(f); (B)that receives direct earned premiums for any type of commercial property and casualty insurance coverage, or, in the case of group life insurance, that receives direct premiums, other than in the case of entities described in sections 103(d) and 103(f); and (C)that meets any other criteria that the Secretary may reasonably prescribe. (11)

Insurer deductible

The term insurer deductible means— (A)for the Transition Period, the value of an insurer's direct earned premiums over the calendar year immediately preceding the date of enactment of this Act, multiplied by 1 percent; (B)for Program Year 1, the value of an insurer's direct earned premiums over the calendar year immediately preceding Program Year 1, multiplied by 7 percent; (C)for Program Year 2, the value of an insurer's direct earned premiums over the calendar year immediately preceding Program Year 2, multiplied by 10 percent; (D)for Program Year 3, the value of an insurer's direct earned premiums over the calendar year immediately preceding Program Year 3, multiplied by 15 percent; (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; (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 (ii)with respect to group life insurance, the value of an insurer’s amount at risk over the calendar year immediately preceding such Program Year, multiplied by 0.0351 percent; (H)notwithstanding subparagraphs (A) through (G), for the Transition Period or any Program Year, if an insurer has not had a full year of operations during the calendar year immediately preceding such Period or Program Year, such portion of the direct earned premiums with respect to property and casualty insurance, and such portion of the amounts at risk with respect to group life insurance, of the insurer as the Secretary determines appropriate, subject to appropriate methodologies established by the Secretary for measuring such direct earned premiums and amounts at risk; (I)notwithstanding subparagraphs (A) through (H) and (J), 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 a percentage, which— (I)for the second additional Program Year, shall be 3.5 percent; and (II)for each succeeding Program Year thereafter, shall be 50 basis points greater than the percentage applicable to the preceding additional Program Year; and (ii)with respect to group life insurance, the value of an insurer’s amount at risk over the calendar year immediately preceding such Program Year, multiplied by a percentage, which— (I)for the first additional Program Year, shall be 0.00614 percent; and (II)for each succeeding Program Year thereafter, shall be 0.088 basis point greater than the percentage applicable to the preceding additional Program Year; (J)notwithstanding subparagraph (G)(i), if aggregate industry insured losses resulting from a certified act of terrorism exceed $1,000,000,000, for any insurer that sustains insured losses resulting from such act of terrorism, the value of such insurer’s direct earned premiums over the calendar year immediately preceding the Program Year, multiplied by a percentage, which— (i)for the first additional Program Year shall be 5 percent; and (ii)for each additional Program Year thereafter, shall be 50 basis points greater than the percentage applicable to the preceding additional Program Year, except that if an act of terrorism occurs during any additional Program Year that results in aggregate industry insured losses exceeding $1,000,000,000, the percentage for the succeeding additional Program Year shall be 5 percent and the increase under this clause shall apply to additional Program Years thereafter;

except that for purposes of determining under this subparagraph whether aggregate industry insured losses exceed $1,000,000,000, the Secretary may combine insured losses resulting from two or more certified acts of terrorism occurring during such Program Year in the same geographic area (with such area determined by the Secretary), in which case such insurer shall be permitted to combine insured losses resulting from such acts of terrorism for purposes of satisfying its insurer deductible under this subparagraph; and except that the insurer deductible under this subparagraph shall apply only with respect to compensation of insured losses resulting from such certified act, or combined certified acts, and that for purposes of compensation of any other insured losses occurring in the same Program Year, the insurer deductible determined under subparagraph (G)(i) or (I) shall apply; and

(K)for the fifth additional Program Year and any Additional Program year thereafter, notwithstanding subparagraph (I)(i), if aggregate industry insured losses resulting from a certified act of NBCR terrorism exceed $1,000,000,000, for any insurer that sustains insured losses resulting from such act of NBCR terrorism, the value of such insurer’s direct earned premiums over the calendar year immediately preceding the Program Year, multiplied by a percentage, which— (i)for the fifth additional Program Year shall be 5 percent; and (ii)for each additional Program Year thereafter, shall be 50 basis points greater than the percentage applicable to the preceding additional Program Year, except that if an act of NBCR terrorism occurs during the fifth additional Program Year or any additional Program Year thereafter that results in aggregate industry insured losses exceeding $1,000,000,000, the percentage for the succeeding additional Program Year shall be 5 percent and the increase under this clause shall apply to additional Program Years thereafter;

except that for purposes of determining under this subparagraph whether aggregate industry insured losses exceed $1,000,000,000, the Secretary may combine insured losses resulting from two or more certified acts of NBCR terrorism occurring during such Program Year in the same geographic area (with such area determined by the Secretary), in which case such insurer shall be permitted to combine insured losses resulting from such acts of NBCR terrorism for purposes of satisfying its insurer deductible under this subparagraph; and except that the insurer deductible under this subparagraph shall apply only with respect to compensation of insured losses resulting from such certified act, or combined certified acts, and that for purposes of compensation of any other insured losses occurring in the same Program Year, the insurer deductible determined under subparagraph (I)(i) shall apply.

(12)

NAIC

The term NAIC means the National Association of Insurance Commissioners. (13)

NBCR terrorism

The term NBCR terrorism means an act of terrorism that involves or triggers nuclear, biological, chemical, or radiological reactions, releases, or contaminations, but only if any aggregate industry insured losses that result from such reactions, releases, or contaminations exceed the amount set forth in paragraph (1)(B)(ii). (14)

Person

The term person means any individual, business or nonprofit entity (including those organized in the form of a partnership, limited liability company, corporation, or association), trust or estate, or a State or political subdivision of a State or other governmental unit. (15)

Program

The term Program means the Terrorism Insurance Program established by this title. (16)

Program years

(A)

Transition period

The term Transition Period means the period beginning on the date of enactment of this Act and ending on December 31, 2002. (B)

Program year 1

The term Program Year 1 means the period beginning on January 1, 2003 and ending on December 31, 2003. (C)

Program year 2

The term Program Year 2 means the period beginning on January 1, 2004 and ending on December 31, 2004. (D)

Program year 3

The term Program Year 3 means the period beginning on January 1, 2005 and ending on December 31, 2005. (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. (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. (17)

Property and casualty insurance

The term property and casualty insurance— (A)means commercial lines of property and casualty insurance, including excess insurance, workers' compensation insurance, and directors and officers liability insurance; and (B)does not include— (i)Federal crop insurance issued or reinsured under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.), or any other type of crop or livestock insurance that is privately issued or reinsured; (ii)private mortgage insurance (as that term is defined in section 2 of the Homeowners Protection Act of 1998 (12 U.S.C. 4901)) or title insurance; (iii)financial guaranty insurance issued by monoline financial guaranty insurance corporations; (iv)insurance for medical malpractice; (v)health or life insurance, including group life insurance; (vi)flood insurance provided under the National Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.); (vii)reinsurance or retrocessional reinsurance; (viii)commercial automobile insurance; (ix)burglary and theft insurance; (x)surety insurance; or (xi)professional liability insurance. (18)

Secretary

The term Secretary means the Secretary of the Treasury. (19)

State

The term State means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, each of the United States Virgin Islands, and any territory or possession of the United States. (20)

United states

The term United States means the several States, and includes the territorial sea and the continental shelf of the United States, as those terms are defined in the Violent Crime Control and Law Enforcement Act of 1994 (18 U.S.C. 2280, 2281). (21)

Rule of construction for dates

With respect to any reference to a date in this title, such day shall be construed— (A)to begin at 12:01 a.m. on that date; and (B)to end at midnight on that date.

103.

Terrorism Insurance Program

(a)

Establishment of Program

(1)

In general

There is established in the Department of the Treasury the Terrorism Insurance Program. (2)

Authority of the secretary

Notwithstanding any other provision of State or Federal law, the Secretary shall administer the Program, and, subject only to subsection (h)(1), shall pay the Federal share of compensation for insured losses in accordance with subsection (e). (3)

Mandatory participation

Each entity that meets the definition of an insurer under this title shall participate in the Program. (4)

NBCR exemption for certain insurers

Notwithstanding the requirements of paragraph (3): (A)

Eligibility

Upon request, the Secretary may provide an exemption from the requirements of subparagraph (B) of subsection (c)(1) in the Program to an entity that otherwise meets the definition of an insurer under this title if— (i)such insurer’s direct earned premium is less than $50,000,000 in the calendar year immediately preceding the current additional Program Year; and (ii)the Secretary makes the determination set forth in subparagraph (D). (B)

Insurer group

For purposes of subparagraph (A)(i), the direct earned premium of any insurer shall include the direct earned premiums of every affiliate of that insurer. (C)

Information and consultation

Any insurer requesting an exemption pursuant to this paragraph shall provide any information the Secretary may require to establish its eligibility for the exemption. In developing standards for evaluating eligibility for the exemption under this paragraph, the Secretary shall consult with the NAIC. (D)

Determination

In making any determination regarding eligibility for exemption under this paragraph, the Secretary shall consult with the insurance commissioner of the State or other appropriate State regulatory authority where the insurer is domiciled and determine whether the insurer has demonstrated that it would become insolvent if it were required, in the event of an act of NBCR terrorism, to satisfy— (i)its deductible and maximum applicable share above the deductible pursuant to sections 102(11)(I) and 103(e)(1)(B), respectively, for such act of NBCR terrorism resulting in aggregate industry insured losses above the trigger established in section 103(e)(1)(C); or (ii)its maximum payment obligations for insured losses for such act of NBCR terrorism resulting in aggregate industry insured losses below the trigger established in section 103(e)(1)(C). (E)

Workers’ compensation and other compulsory insurance law

In granting an exemption under this paragraph, the Secretary shall not approve any request for exemption with regard to State workers’ compensation insurance or other compulsory insurance law requiring coverage of the risks described in subparagraph (B) of subsection (c)(1). (F)

Exemption period

(i)

In general

Any exemption granted to an insurer by the Secretary under this paragraph shall have a duration of not longer than 2 years. (ii)

Extension

Notwithstanding clause (i), the Secretary may, upon application by an insurer granted an exemption under this paragraph, extend such exemption for additional periods of not longer than 2 years. (b)

Conditions for Federal Payments

No payment may be made by the Secretary under this section with respect to an insured loss that is covered by an insurer, unless— (1)there is enacted a joint resolution for payment of Federal compensation with respect to the act of terrorism that resulted in the insured loss; (2)the person that suffers the insured loss, or a person acting on behalf of that person, files a claim with the insurer; (3)the insurer provides clear and conspicuous disclosure to the policyholder of the premium charged for insured losses covered by the Program (including the additional premium, if any, charged for the coverage for insured losses resulting from acts of NBCR terrorism as made available pursuant to subsection (c)(1)(B)) and the Federal share of compensation for insured losses under the Program— (A)in the case of any policy that is issued before the date of enactment of this Act, not later than 90 days after that date of enactment; (B)in the case of any policy that is issued within 90 days of the date of enactment of this Act, at the time of offer, purchase, and renewal of the policy; and (C)in the case of any policy that is issued more than 90 days after the date of enactment of this Act, on a separate line item in the policy, at the time of offer, purchase, and renewal of the policy; (4)the insurer processes the claim for the insured loss in accordance with appropriate business practices, and any reasonable procedures that the Secretary may prescribe; and (5)the insurer submits to the Secretary, in accordance with such reasonable procedures as the Secretary may establish— (A)a claim for payment of the Federal share of compensation for insured losses under the Program; (B)written certification— (i)of the underlying claim; and (ii)of all payments made for insured losses; and (C)certification of its compliance with the provisions of this subsection. (c)

Mandatory Availability

(1)

Availability of coverage for insured losses

Subject to paragraph (3), during each Program Year, each entity that meets the definition of an insurer under section 102 shall make available— (A)in all of its insurance policies for covered lines, coverage for insured losses that does not differ materially from the terms, amounts, and other coverage limitations applicable to losses arising from events other than acts of terrorism; and (B)in insurance policies for covered lines for which the coverage described in subparagraph (A) is provided, exceptions to the pollution and nuclear hazard exclusions of such policies that render such exclusions inapplicable only as to insured losses arising from acts of NBCR terrorism. (2)

Allowable exclusions in other coverage

Subject to paragraph (3) and notwithstanding any other provision of Federal or State law, including any State workers’ compensation and other compulsory insurance law, if a person elects not to purchase an insurance policy with the coverage described in paragraph (1)— (A)an insurer may exclude coverage for all losses from acts of terrorism including acts of NBCR terrorism, except for State workers’ compensation and other compulsory insurance law requiring coverage of the risks described in subsection (c)(1) (unless permitted by State law); or (B)an insurer may offer other options for coverage that differ materially from the terms, amounts, and other coverage limitations applicable to losses arising from events other than acts of terrorism;

except that nothing in this paragraph shall affect paragraph (4).

(3)

Applicability for NBCR terrorism

Notwithstanding any other provision of this Act, paragraphs (1)(B) and (2) shall apply, beginning upon January 1, 2009, with respect to coverage for acts of NBCR terrorism, that is purchased or renewed on or after such date. (4)

Availability of life insurance without regard to lawful foreign travel

During each Program Year, each entity that meets the definition of an insurer under section 102 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 fraudulent situation exists which is ongoing; and (bb)the credibility of information by which the insurer can verify the death of the insured person is substantially 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. (d)

State Residual Market Insurance Entities

(1)

In general

The Secretary shall issue regulations, as soon as practicable after the date of enactment of this Act, that apply the provisions of this title to State residual market insurance entities and State workers' compensation funds. (2)

Treatment of certain entities

For purposes of the regulations issued pursuant to paragraph (1)— (A)a State residual market insurance entity that does not share its profits and losses with private sector insurers shall be treated as a separate insurer; and (B)a State residual market insurance entity that shares its profits and losses with private sector insurers shall not be treated as a separate insurer, and shall report to each private sector insurance participant its share of the insured losses of the entity, which shall be included in each private sector insurer's insured losses. (3)

Treatment of participation in certain entities

Any insurer that participates in sharing profits and losses of a State residual market insurance entity shall include in its calculations of premiums any premiums distributed to the insurer by the State residual market insurance entity. (e)

Insured Loss Shared Compensation

(1)

Federal share

(A)

Conventional terrorism

Except as provided in subparagraph (B), the Federal share of compensation under the Program to be paid by the Secretary, subject to subsection (h)(1), 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)exceed 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 result in 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), result in 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, subject to subsection (h)(1), 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), result in 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 result from any such reactions, releases, or contaminations and that— (I)exceed 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 result in aggregate industry insured losses during such Program Year exceeding $100,000,000,000. (C)

Program trigger

In the case of a certified act of terrorism occurring after March 31, 2006, no compensation shall be paid, pursuant to subsection (h)(1), by the Secretary under subsection (a), unless the aggregate industry insured losses resulting from such certified act of terrorism exceed $50,000,000, except that if a certified act of terrorism occurs for which resulting aggregate industry insured losses exceed $1,000,000,000, the applicable amount for any subsequent certified act of terrorism shall be the amount specified in section 102(1)(B)(ii). (D)

Limitation on compensation for group life insurance

Notwithstanding any other provision of this Act, the Federal share of compensation under the Program paid, pursuant to subsection (h)(1), by the Secretary for insured losses of an insurer resulting from coverage of any single certificate holder under any group life insurance coverages of the insurer may not during any additional Program Year exceed $1,000,000. (E)

Prohibition on duplicative compensation

The Federal share of compensation for insured losses under the Program shall be reduced by the amount of compensation provided by the Federal Government to any person under any other Federal program for those insured losses. (2)

Cap on annual liability

(A)

In general

Notwithstanding paragraph (1) or any other provision of Federal or State law, including any State workers’ compensation or other compulsory insurance law, if the aggregate amount of the Federal share of compensation to be paid to all insurers pursuant to paragraph (1) exceeds $100,000,000,000, during any additional Program Year (until such time as the Congress may act otherwise with respect to such losses)— (i)the Secretary shall not make any payment under this title for any portion of the amount of the aggregate insured losses during such Program Year for which the Federal share exceeds $100,000,000,000; and (ii)no insurer that has met its insurer deductible shall be liable for the payment of any portion of the aggregate insured losses during such Program Year that exceeds $100,000,000,000. (B)

Insurer share

For purposes of subparagraph (A), the Secretary shall determine the pro rata share of insured losses to be paid by each insurer that incurs insured losses under the Program. (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 individuals affected by an act of terrorism, of a portion of claims for insured losses promptly upon filing of such claims. (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 as follows: (i)

Federal compensation not provided

In any case of an act of terrorism with respect to which there has not been enacted a joint resolution for payment of Federal compensation described in subsection (h)(2), an insurer’s financial responsibility for insured losses from such act of terrorism shall be limited to its applicable insurer deductible. (ii)

Federal compensation provided

In any case of an act of terrorism with respect to which there has been enacted a joint resolution for payment of Federal compensation described in subsection (h)(2), an insurer’s financial responsibility for insured losses from such act of terrorism shall be limited to— (I)its applicable insurer deductible; and (II)its applicable share of insured losses that exceed its applicable insurer deductible, subject to the requirements of paragraph (2). (B)

Federal reimbursement

In the case of any act of terrorism with respect to which there has been enacted a joint resolution for payment of Federal compensation described in subsection (h)(2) and 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 paragraph 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) 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 paragraph shall be removed to a district court of the United States in accordance with subparagraph (D). (D)

Venue

For each certification 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 insurer’s financial responsibility for insured losses from acts of terrorism under this paragraph. (E)

Federal court jurisdiction and venue in cases of no Federal compensation

In the case of any act of terrorism with respect to which there has not been enacted a joint resolution for payment of Federal compensation described in subsection (h)(2)— (i)all claims relating to or arising out of an insurer's financial responsibility for insured losses from such act of terrorism shall be within the original and exclusive jurisdiction of the district courts of the United States, in accordance with the procedures established in clause (iii); (ii)all pending State court actions that relate to or arise out of an insurer's financial responsibility for insured losses from such act of terrorism shall be removed to a district court of the United States in accordance with clause (iii); and (iii)not later than 90 days after the Secretary's certification of such act of terrorism, 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 insurer's financial responsibility for insured losses from such act of terrorism. (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 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, in the case of any act of terrorism with respect to which there has been enacted a joint resolution for payment of Federal compensation described in subsection (h)(2), no insurer that has met its applicable insurer deductible and its applicable share of insured losses that exceed its applicable insurer deductible but are not compensated pursuant to paragraph (1), 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. All policies for property and casualty insurance and group life insurance shall be deemed to contain, and insurers shall be permitted to include in their policies, a provision to the effect that, in the case of insured losses resulting from any act of terrorism with respect to which there has not been enacted a joint resolution for payment of Federal compensation described in subsection (h)(2), no insurer shall be obligated to pay for any portion of any such insured losses that exceeds its applicable insurer deductible. (5)

Final netting

The Secretary shall have sole discretion to determine the time at which claims relating to any insured loss or act of terrorism shall become final. (6)

Determinations final

Any determination of the Secretary under this subsection shall be final, unless expressly provided, and shall not be subject to judicial review. (7)

Insurance marketplace aggregate retention amount

For purposes of paragraph (8), the insurance marketplace aggregate retention amount shall be— (A)for the period beginning on the first day of the Transition Period and ending on the last day of Program Year 1, the lesser of— (i)$10,000,000,000; and (ii)the aggregate amount, for all insurers, of insured losses during such period; (B)for Program Year 2, the lesser of— (i)$12,500,000,000; and (ii)the aggregate amount, for all insurers, of insured losses during such Program Year; (C)for Program Year 3, the lesser of— (i)$15,000,000,000; and (ii)the aggregate amount, for all insurers, of insured losses during such Program Year; (D)for Program Year 4, the lesser of— (i)$25,000,000,000; and (ii)the aggregate amount, for all insurers, of insured losses during such Program Year; (E)for Program Year 5, the lesser of— (i)$27,500,000,000; and (ii)the aggregate amount, for all insurers, of insured losses during such Program Year; and (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 (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. (8)

Recoupment of federal share

(A)

Mandatory recoupment amount

For purposes of this paragraph, the mandatory recoupment amount for each of the Program Years referred to in subparagraphs (A) through (F) of paragraph (7) shall be the difference between— (i)the applicable insurance marketplace aggregate retention amount under paragraph (7) for such Program Year; and (ii)the aggregate amount, for all applicable insurers (pursuant to subparagraph (E)), of insured losses during such Program Year that are not compensated by the Federal Government because such losses— (I)are within the insurer deductible for the insurer subject to the losses; or (II)are within the portion of losses of the insurer that exceed the insurer deductible, but are not compensated pursuant to paragraph (1). (B)

No mandatory recoupment if uncompensated losses exceed applicable insurance marketplace retention

Notwithstanding subparagraph (A), if the aggregate amount of uncompensated insured losses referred to in clause (ii) of such subparagraph for any Program Year referred to in any of subparagraphs (A) through (F) of paragraph (7) is greater than the applicable insurance marketplace aggregate retention amount under paragraph (7) for such Program Year, the mandatory recoupment amount shall be $0. (C)

Mandatory establishment of surcharges to recoup mandatory recoupment amount

The Secretary shall collect, for repayment of the Federal financial assistance provided in connection with all acts of terrorism (or acts of war, in the case of workers’ compensation) occurring during any of the Program Years referred to in any of subparagraphs (A) through (F) of paragraph (7), terrorism loss risk-spreading premiums in an amount equal to any mandatory recoupment amount for such Program Year. (D)

Discretionary recoupment of remainder of financial assistance

To the extent that the amount of Federal financial assistance provided exceeds any mandatory recoupment amount, the Secretary may— (i)recoup, through terrorism loss risk-spreading premiums, such additional amounts; or (ii)submit a report to the Congress identifying such amounts that the Secretary believes cannot be recouped, based on— (I)the ultimate costs to taxpayers of no additional recoupment; (II)the economic conditions in the commercial marketplace, including the capitalization, profitability, and investment returns of the insurance industry and the current cycle of the insurance markets; (III)the affordability of commercial insurance for small- and medium-sized businesses; and (IV)such other factors as the Secretary considers appropriate. (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 applied to property and casualty insurance policies; and (ii)any recoupment under this paragraph of amounts paid for Federal financial assistance for insured losses for group life insurance shall be applied to group life insurance policies. (9)

Policy surcharge for terrorism loss risk-spreading premiums

(A)

Policyholder premium

Subject to paragraph (8)(E), any amount established by the Secretary as a terrorism loss risk-spreading premium shall— (i)be imposed as a policyholder premium surcharge on property and casualty insurance policies and group life insurance policies in force after the date of such establishment; (ii)begin with such period of coverage during the year as the Secretary determines appropriate; and (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 group life insurance coverage under the policy. (B)

Collection

The Secretary shall provide for insurers to collect terrorism loss risk-spreading premiums and remit such amounts collected to the Secretary. (C)

Percentage limitation

A terrorism loss risk-spreading premium may not exceed, on an annual basis— (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 under the policy. (D)

Adjustment for urban and smaller commercial and rural areas and different lines of insurance

(i)

Adjustments

In determining the method and manner of imposing terrorism loss risk-spreading premiums, including the amount of such premiums, the Secretary shall take into consideration— (I)the economic impact on commercial centers of urban areas, including the effect on commercial rents and commercial insurance premiums, particularly rents and premiums charged to small businesses, and the availability of lease space and commercial insurance within urban areas; (II)the risk factors related to rural areas and smaller commercial centers, including the potential exposure to loss and the likely magnitude of such loss, as well as any resulting cross-subsidization that might result; and (III)the various exposures to terrorism risk for different lines of insurance. (ii)

Recoupment of adjustments

Any mandatory recoupment amounts not collected by the Secretary because of adjustments under this subparagraph shall be recouped through additional terrorism loss risk-spreading premiums. (E)

Timing of premiums

The Secretary may adjust the timing of terrorism loss risk-spreading premiums to provide for equivalent application of the provisions of this title to policies that are not based on a calendar year, or to apply such provisions on a daily, monthly, or quarterly basis, as appropriate. (f)

Captive Insurers and Other Self-Insurance Arrangements

The Secretary may, in consultation with the NAIC or the appropriate State regulatory authority, apply the provisions of this title, as appropriate, to other classes or types of captive insurers and other self-insurance arrangements by municipalities and other entities (such as workers' compensation self-insurance programs and State workers' compensation reinsurance pools), but only if such application is determined before the occurrence of an act of terrorism in which such an entity incurs an insured loss and all of the provisions of this title are applied comparably to such entities. (g)

Reinsurance to Cover Exposure

(1)

Obtaining coverage

This title may not be construed to limit or prevent insurers from obtaining reinsurance coverage for insurer deductibles or insured losses retained by insurers pursuant to this section, nor shall the obtaining of such coverage affect the calculation of such deductibles or retentions. (2)

Limitation on financial assistance

The amount of financial assistance provided pursuant to this section shall not be reduced by reinsurance paid or payable to an insurer from other sources, except that recoveries from such other sources, taken together with financial assistance for the Transition Period or a Program Year provided pursuant to this section, may not exceed the aggregate amount of the insurer's insured losses for such period. If such recoveries and financial assistance for the Transition Period or a Program Year exceed such aggregate amount of insured losses for that period and there is no agreement between the insurer and any reinsurer to the contrary, an amount in excess of such aggregate insured losses shall be returned to the Secretary. (h)

Privileged procedure for joint resolution for payment of Federal compensation

(1)

In general

The Secretary shall pay the Federal share of compensation under the Program for insured losses resulting from an act of terrorism only if there is enacted a joint resolution for payment of Federal compensation with respect to such act of terrorism. (2)

Joint resolution

For purposes of this subsection, the term joint resolution for payment of Federal compensation means a joint resolution that— (A)does not have a preamble; (B)the matter after the resolving clause of which is as follows: That the Congress approves of the certification by the Secretary of the Treasury under section 102(1)(A) of the Terrorism Risk Insurance Act of 2002.; and (C)the title of which is as follows: To permit Federal compensation under the Terrorism Risk Insurance Act of 2002. (3)

Introduction and referral

Upon receipt of a submission under section 102(1)(G), the joint resolution described in this subsection shall be introduced by the majority leader of each House or his designee (by request). In the case in which a House is not in session, such joint resolution shall be so introduced upon convening the first day of session after the date of receipt of the certification. Upon introduction, the joint resolution shall be referred to the appropriate calendar in each House. (4)

Consideration in the house of representatives

(A)

Proceeding to consideration

Upon referral to the appropriate calendar, it shall be in order to move to proceed to consider the joint resolution in the House. Such a motion shall be in order only at a time designated by the Speaker in the legislative schedule within two legislative days. The previous question shall be considered as ordered on the motion to its adoption without intervening motion. A motion to reconsider the vote by which the motion is disposed of shall not be in order. (B)

Consideration

The joint resolution shall be considered as read. All points of order against the joint resolution and against its consideration are waived. The previous question shall be considered as ordered on the joint resolution to its passage without intervening motion except one hour of debate equally divided and controlled by a proponent and an opponent and one motion to limit debate on the joint resolution. A motion to reconsider the vote on passage of the joint resolution shall not be in order. (5)

Consideration in the senate

(A)

Proceeding

Upon introduction, the joint resolution shall be placed on the Calendar of Business, General Orders. A motion to proceed to the consideration of the joint resolution shall be in order at any time. The motion is privileged and not debatable. A motion to proceed to consideration of the joint resolution may be made even though a previous motion to the same effect has been disagreed to. An amendment to the motion shall not be in order, nor shall it be in order to move to reconsider the vote by which the motion is agreed to. (B)

Debate

Debate on the joint resolution, and all debatable motions and appeals in connection therewith, shall be limited to not more than ten hours. The time shall be equally divided between and controlled by, the majority leader and the minority leader or their designees. (C)

Debatable motions and appeals

Debate on any debatable motion or appeal in relation to the joint resolution shall be limited to not more than one hour from the time allotted for debate, equally divided and controlled by the majority leader and the minority leader or their designees. (D)

Motion to limit debate

A motion to further limit debate is not debatable. (E)

Motion to recommit

Any motion to commit or recommit the joint resolution shall not be in order. (F)

Final passage

The Chair shall put the question on final passage of the joint resolution no later than 72 hours from the time the measure is introduced. (6)

Amendments prohibited

No amendment to, or motion to strike a provision from, a joint resolution considered under this subsection shall be in order in either the Senate or the House of Representatives. (7)

Consideration by the other House

In the case of a joint resolution described in this subsection, if before passage by one House of a joint resolution of that House, that House receives such joint resolution from the other House, then— (A)the procedure in that House shall be the same as if no joint resolution had been received from the other House; but (B)the vote on final passage shall be on the joint resolution of the other House. (8)

House and Senate rulemaking

This subsection is enacted by the Congress as an exercise of the rulemaking power of the House of Representatives and Senate, respectively, and as such is deemed a part of the rules of each House, respectively, and such procedures supersede other rules only to the extent that they are inconsistent with such rules; and with full recognition of the constitutional right of either House to change the rules (so far as relating to the procedures of that House) at any time, in the same manner, and to the same extent as any other rule of that House.

;

(2)in section 104(a)— (A)in paragraph (1), by striking and at the end; (B)in paragraph (2), by striking the period and inserting ; and; and (C)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.

;

(3)in section 104, by adding at the end the following new subsection:

(h)

Annual adjustment

(1)

In general

Notwithstanding any other provision of this title, the Secretary shall adjust, for the second additional Program Year and for each additional Program Year thereafter, based upon the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), as published by the Bureau of Labor Statistics of the Department of Labor, during the 12-month period preceding such program year, each of the dollar amounts set forth in this title (as such amount may have been previously adjusted), including the following amounts: (A)The dollar amount in section 102(1)(B)(ii) (relating to act of terrorism). (B)The dollar amounts in subparagraphs (J) and (K) of section 102(11) (relating to an insurer deductible threshold based on the amount of aggregate industry insured losses). (C)The dollar amounts in subparagraphs (A) and (B) of section 103(e)(1) (relating to limitation on Federal share). (D)The dollar amounts in section 103(e)(1)(C) (relating to Program trigger). (E)The dollar amount in section 103(e)(1)(D) (relating to limitation on group life insurance compensation). (F)The dollar amounts in section 103(e)(2) (relating to cap on annual liability). (G)The dollar amounts in section 103(e)(3)(C) (relating to limitation on insurer financial liability). (H)The dollar amounts in section 103(e)(4) (relating to notices regarding losses and annual liability cap). (I)The dollar amounts in section 103(e)(7) (relating to insurance marketplace aggregate retention amount). (J)The dollar amounts in section 109(b)(1)(C) (relating to membership of Commission on Terrorism Insurance Risk). (2)

Publication

The Secretary shall make the dollar amounts for each additional Program Year, as adjusted pursuant to this subsection, publicly available in a timely manner.

;

(4)in section 106(a)(2)— (A)in subparagraph (B), by striking and at the end; (B)by redesignating subparagraph (C) as subparagraph (F); and (C)by inserting after subparagraph (B) the following new subparagraphs:

(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, and group life insurance, required by this title and providing coverage except 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; (D)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, 2009, forms for property and casualty insurance, and group life insurance, covered by this title and providing coverage for NBCR terrorism that are filed with any State, to the extent of the addition of such coverage for NBCR terrorism and where such coverage was not previously required, shall not be subject to prior approval or waiting period under any law of a State that would otherwise be applicable; (E)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, 2010, rates for property and casualty insurance, and group life insurance, covered by this title and providing coverage for NBCR terrorism that are filed with any State, to the extent of the addition of such coverage for NBCR terrorism and where such coverage was not previously required, shall not be subject to prior approval or 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 inadequate or unfairly discriminatory; and

;

(5)in section 106, by adding at the end the following new subsection:

(c)

Rule of construction regarding insurer coordination

Nothing in this Act shall be construed to prohibit, restrict, or otherwise limit an insurer from entering into an arrangement with another insurer to make available coverage for any portion of insured losses to fulfill the requirements of section 103(c). The Secretary shall develop, in consultation with the NAIC, minimum financial solvency standards and other standards the Secretary determines appropriate with respect to such arrangements. Nothing in this subsection shall be construed to establish any legal partnership.

; and

(6)in section 108(c)(1), by striking paragraph (4), (5), (6), (7), or (8) and inserting paragraph (5), (6), (7), (8), or (9). (b)

Regulations on claims allocations

The Secretary of the Treasury shall issue the regulations referred to in subparagraph (C) of section 103(e)(2) of the Terrorism Risk Insurance Act of 2002, as amended by subsection (a)(1) of this section, and to carry out subparagraph (B) of such section 103(e)(2), not later than the expiration of the 120-day period beginning upon the date of the enactment of this Act. (c)

Regulations on certification of an act of NBCR Terrorism

The Secretary of the Treasury shall issue the regulations to carry out subparagraph (C) of section 102(1) of the Terrorism Risk Insurance Act of 2002, as amended by subsection (a)(1) of this section, not later than the expiration of the 180-day period beginning upon the date of the enactment of this Act. (d)

Regulations on NBCR exemptions

The Secretary of the Treasury shall issue the regulations to carry out paragraph (4) of section 103(a) of the Terrorism Risk Insurance Act of 2002, as amended by subsection (a)(1) of this section, not later than the expiration of the 180-day period beginning upon the date of the enactment of this Act.