[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4871 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4871

To reauthorize the Terrorism Risk Insurance Act of 2002, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 17, 2014

   Mr. Neugebauer (for himself and Mr. Westmoreland) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
To reauthorize the Terrorism Risk Insurance Act of 2002, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``TRIA Reform Act of 
2014''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. References.
Sec. 3. Extension of program.
Sec. 4. Certification of acts of terrorism.
Sec. 5. Separate treatment of conventional terrorism from NBCR 
                            terrorism.
Sec. 6. Availability of coverage.
Sec. 7. Terrorism loss risk-spreading premiums amount.
Sec. 8. Increase of aggregate retention amount; mandatory recoupment.
Sec. 9. Terrorism loss risk-spreading premium.
Sec. 10. Risk-sharing mechanisms.
Sec. 11. Reporting of terrorism insurance data.
Sec. 12. Delivery of notices to policyholders.
Sec. 13. Definition of control.
Sec. 14. Annual study of small insurer market competitiveness.
Sec. 15. CBO and OMB studies regarding budgeting for costs of Federal 
                            insurance programs.
Sec. 16. GAO study on upfront premiums and capital reserve fund.

SEC. 2. REFERENCES.

    Except as otherwise expressly provided, wherever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Terrorism Risk Insurance 
Act of 2002 (15 U.S.C. 6701 note).

SEC. 3. EXTENSION OF PROGRAM.

    (a) In General.--Subsection (a) of section 108 (15 U.S.C. 6701 
note) is amended by striking ``December 31, 2014'' and inserting 
``December 31, 2019''.
    (b) Program Years.--Subparagraph (G) of section 102(11) (15 U.S.C. 
6701 note) is amended by striking ``2014'' and inserting ``2019''.

SEC. 4. CERTIFICATION OF ACTS OF TERRORISM.

    (a) In General.--Paragraph (1) of section 102 (15 U.S.C. 6701 note) 
is amended--
            (1) in subparagraph (A), in the matter preceding clause 
        (i), by striking ``concurrence with the Secretary of State'' 
        and inserting ``consultation with the Secretary of Homeland 
        Security'';
            (2) in subparagraph (B)--
                    (A) in clause (i), by striking ``; or'' and 
                inserting a period;
                    (B) by striking clause (ii); and
                    (C) by striking ``terrorism if--'' and all that 
                follows through ``(I) the act'' and inserting 
                ``terrorism if the act'';
            (3) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (E) and (G), respectively;
            (4) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) Timing of certification.--
                            ``(i) Preliminary certification notice.--
                        The Secretary shall issue a preliminary 
                        certification notice indicating whether an act 
                        is expected to be a certified act of terrorism 
                        not later than 15 days after--
                                    ``(I) the date of the occurrence of 
                                a potential act of terrorism; or
                                    ``(II) the receipt of a petition 
                                seeking a preliminary certification 
                                decision submitted by an insurer having 
                                an in-force policy or policies that 
                                could be affected by a certification 
                                decision.
                            ``(ii) Final certification notice.--Not 
                        later than 90 days after the date of the 
                        occurrence of a potential act of terrorism or 
                        the receipt of a petition submitted to the 
                        Secretary pursuant to clause (i)(II), the 
                        Secretary shall issue a final certification 
                        notice indicating whether an act is a certified 
                        act of terrorism for purposes of this Act.
                            ``(iii) Rule of construction.--Failure to 
                        issue a preliminary certification notice under 
                        clause (i) shall not prevent the Secretary from 
                        issuing a final certification notice under 
                        clause (ii).''; and
            (5) by inserting before subparagraph (G), as so 
        redesignated by paragraph (3) of this subsection, the following 
        new subparagraph:
                    ``(F) Failure to make determination.--If the 
                Secretary does not certify, or make a determination not 
                to certify, an act as an act of terrorism before the 
                expiration of the 90-day period beginning on the 
                occurrence of such act, such act shall be treated for 
                purposes of this Act as having been determined by the 
                Secretary not to be an act of terrorism and such 
                determination shall be final and shall not be subject 
                to judicial review.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2015, and Program Years 
thereafter.

SEC. 5. SEPARATE TREATMENT OF CONVENTIONAL TERRORISM FROM NBCR 
              TERRORISM.

    (a) Definition.--
            (1) In general.--Section 102 (15 U.S.C. 6701 note) is 
        amended--
                    (A) in paragraph (1), by inserting after 
                subparagraph (C), as added by section 4(a)(4) of this 
                Act, the following new subparagraph:
                    ``(D) Act of nbcr terrorism.--Each certification of 
                an act of terrorism under subparagraph (A) shall 
                include a determination of whether such act involves 
                NBCR terrorism.'';
                    (B) by redesignating paragraphs (9) through (16) as 
                paragraphs (10) through (17), respectively; and
                    (C) by inserting after paragraph (8) the following 
                new paragraph:
            ``(9) NBCR terrorism.--Notwithstanding paragraph (1), the 
        term `NBCR terrorism' means an act of terrorism to the extent 
        that the insured losses involve, regardless of any other cause 
        or event that contributes concurrently or in any sequence to 
        such insurance loss--
                    ``(A) an act of terrorism that is carried out by 
                means of the dispersal or application of radioactive 
                material, or through the use of a nuclear weapon or 
                device that involves or produces a nuclear reaction, 
                nuclear radiation, or radioactive contamination;
                    ``(B) the release of radioactive material, and it 
                appears that one purpose of the act of terrorism was to 
                release such material;
                    ``(C) an act of terrorism that is carried out by 
                means of the dispersal or application of pathogenic or 
                poisonous biological or chemical material; or
                    ``(D) the release of pathogenic or poisonous 
                biological or chemical material, and it appears that 
                one purpose of the act of terrorism was to release such 
                material.''.
            (2) Applicability.--The amendments made by paragraph (1) 
        shall apply to the Program Year for the Terrorism Insurance 
        Program established by title I of the Terrorism Risk Insurance 
        Act of 2002 (15 U.S.C. 6701 note) that begins on January 1, 
        2016, and Program Years thereafter.
    (b) Federal Share of Insured Loss Compensation.--Subparagraph (A) 
of section 103(e)(1) (15 U.S.C. 6701 note) is amended--
            (1) by striking ``The Federal share'' and inserting 
        ``Subject to subparagraphs (B) and (C), the Federal share'';
            (2) by striking ``an insurer during the Transition period'' 
        and inserting the following: ``an insurer--
                            ``(i) during the Transition period,'';
            (3) by inserting ``through the Program Year ending on 
        December 31, 2015,'' after ``each Program Year thereafter'';
            (4) by striking the period at the end and inserting ``; 
        and''; and
            (5) by adding at the end the following new clause:
                            ``(ii) shall be equal to--
                                    ``(I) except as provided in 
                                subclause (II)--
                                            ``(aa) during the Program 
                                        Year beginning on January 1, 
                                        2016, 84 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year;
                                            ``(bb) during the Program 
                                        Year beginning on January 1, 
                                        2017, 83 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year;
                                            ``(cc) during the Program 
                                        Year beginning on January 1, 
                                        2018, 82 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year; and
                                            ``(dd) during the Program 
                                        Year beginning on January 1, 
                                        2019, 80 percent of that 
                                        portion of the amount of such 
                                        insured losses that exceeds the 
                                        applicable insurer deductible 
                                        required to be paid during such 
                                        Program Year; and
                                    ``(II) in the case of insured 
                                losses resulting from acts of NBCR 
                                terrorism, during the Program Year 
                                beginning on January 1, 2016, and each 
                                Program Year thereafter, 85 percent of 
                                that portion of the amount of such 
                                insured losses that exceeds the 
                                applicable insurer deductible required 
                                to be paid during such Program Year.''.
    (c) Program Trigger.--Subparagraph (B) of section 103(e)(1) (15 
U.S.C. 6701 note) is amended--
            (1) in the matter preceding clause (i)--
                    (A) by striking ``a certified act'' and inserting 
                ``certified acts''; and
                    (B) by striking ``such certified act'' and 
                inserting ``such certified acts'';
            (2) in clause (i) by striking ``or'' at the end;
            (3) in clause (ii), by striking the period at the end and 
        inserting the following ``through the Program Year ending on 
        December 31, 2015; or'';
            (4) by adding at the end the following:
                            ``(iii)(I) except as provided in subclause 
                        (II)--
                                    ``(aa) $200,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2016;
                                    ``(bb) $300,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2017;
                                    ``(cc) $400,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2018; and
                                    ``(dd) $500,000,000, with respect 
                                to such insured losses occurring in the 
                                Program Year beginning on January 1, 
                                2019; and
                            ``(II) in the case of an act of NBCR 
                        terrorism, $100,000,000, with respect to such 
                        insured losses occurring in the Program Year 
                        beginning on January 1, 2016, or any Program 
                        Year thereafter.''; and
            (5) by adding after and below clause (iii), as added by 
        paragraph (4) of this subsection, the following:
                ``In determining the aggregate industry insured losses 
                resulting from certified acts of terrorism for purposes 
                of this subparagraph, the Secretary shall not consider 
                any act of terrorism resulting, in the aggregate, in 
                less than $50,000,000 in insured losses.''.

SEC. 6. AVAILABILITY OF COVERAGE.

    Subsection (c) of section 103 (15 U.S.C. 6701 note) is amended to 
read as follows:
    ``(c) Mandatory Availability.--
            ``(1) In general.--Except as provided in paragraph (2), 
        during each Program Year, each entity that meets the definition 
        of an insurer under section 102 shall make available--
                    ``(A) in all of its property and casualty insurance 
                policies, coverage for insured losses; and
                    ``(B) property and casualty insurance 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.
            ``(2) No mandatory availability for small insurers.--The 
        Secretary shall provide, by regulation and in consultation with 
        State insurance regulatory authorities, that paragraph (1) 
        shall not apply for a Program Year with respect to any small 
        insurer (as such term is defined in such regulations by the 
        Secretary) that, at the option of the insurer, makes a request 
        for such inapplicability for such Program Year to the 
        appropriate State insurance regulatory authority for the State 
        in which such insurer is domiciled and is determined by such 
        State insurance regulatory authority to meet such requirements 
        for financial hardship or financial infeasibility of providing 
        coverage for insured losses as the Secretary shall establish in 
        such regulations. The insurer shall provide notice, in a manner 
        satisfactory to the State insurance regulatory authority, 
        informing affected prospective and current policyholders 
        whether such coverage is not provided by the insurer. This 
        paragraph may not be construed to require any State insurance 
        regulatory authority to undertake making determinations under 
        this paragraph.''.

SEC. 7. TERRORISM LOSS RISK-SPREADING PREMIUMS AMOUNT.

    (a) In General.--Subparagraph (C) of section 103(e)(7) (15 U.S.C. 
6701 note) is amended--
            (1) by striking ``subparagraphs (A) through (E)'' and 
        inserting ``subparagraphs (A) through (F)''; and
            (2) by striking ``133 percent'' and inserting ``150 
        percent''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2016, and Program Years 
thereafter.

SEC. 8. INCREASE OF AGGREGATE RETENTION AMOUNT; MANDATORY RECOUPMENT.

    (a) In General.--Paragraph (6) of section 103(e) (15 U.S.C. 6701 
note) is amended--
            (1) in subparagraph (D)(ii), by striking ``and'' at the 
        end;
            (2) in subparagraph (E)--
                    (A) in the matter preceding clause (i), by 
                inserting ``through the Program Year ending on December 
                31, 2015'' before the comma; and
                    (B) in clause (ii), by striking the period at the 
                end and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(F) for the Program Year beginning January 1, 
                2016, and each Program Year thereafter, the lesser of--
                            ``(i) the amount that is equal to the sum 
                        of the insurer deductibles for the Program Year 
                        for all insurers participating in the Program; 
                        and
                            ``(ii) the aggregate amount, for all 
                        insurers, of insured losses during such Program 
                        Year.''.
    (b) Mandatory Recoupment.--
            (1) Amount; timing.--Paragraph (7) of section 103(e) (15 
        U.S.C. 6701 note) is amended--
                    (A) by striking subparagraphs (A) and (B) and 
                inserting the following new subparagraph:
                    ``(A) Mandatory recoupment amount.--For purposes of 
                this paragraph, the mandatory recoupment amount for 
                each of the periods referred to in subparagraphs (A) 
                through (F) of paragraph (6) shall be equal to the 
                lesser of--
                            ``(i) the aggregate amount, for all 
                        insurers, of insured losses during such period 
                        that are compensated by the Federal Government 
                        pursuant to paragraph (1); or
                            ``(ii) the insurance marketplace aggregate 
                        retention amount under paragraph (6) for such 
                        period.'';
                    (B) in subparagraph (E)(i)(III), by striking 
                ``after January 1, 2012'' and inserting ``before 
                December 31, 2014''; and
                    (C) by redesignating subparagraphs (C), (D), (E) 
                (as so amended), and (F) as subparagraphs (B), (C), 
                (D), and (E), respectively.
            (2) Conforming amendments.--Section 103(e) (15 U.S.C. 6701 
        note) is amended--
                    (A) in paragraph (7)(D)(i), as so redesignated by 
                paragraph (1)(B) of this subsection, by striking 
                ``subparagraph (C)'' and inserting ``subparagraph 
                (B)''; and
                    (B) in paragraph (8)--
                            (i) in subparagraph (C), by striking 
                        ``paragraph (7)(D)'' and inserting ``paragraph 
                        (7)(C)''; and
                            (ii) in subparagraph (D)(ii), by striking 
                        ``paragraph (7)(E)'' and inserting ``paragraph 
                        (7)(D)''.

SEC. 9. TERRORISM LOSS RISK-SPREADING PREMIUM.

    (a) In General.--Section 103(e) (15 U.S.C. 6701 note) is amended by 
striking paragraph (8) and inserting the following new paragraph:
            ``(8) Terrorism loss risk-spreading premiums.--
                    ``(A) Establishment.--After an act of terrorism, 
                the Secretary shall, to the extent provided in 
                subparagraph (7)(C), and may, to the extent provided in 
                subparagraph (7)(D), establish terrorism loss risk-
                spreading premiums, which shall be imposed as a 
                policyholder premium surcharge on property and casualty 
                insurance policies for all participating insurers in 
                force after the date of such establishment.
                    ``(B) Collection.--The Secretary shall provide for 
                insurers to collect terrorism loss risk-spreading 
                premiums and remit such amounts collected to the 
                Secretary.
                    ``(C) Determination of premiums.--In determining 
                the method and manner of imposing terrorism loss risk-
                spreading premiums, including the amount of such 
                premiums, the Secretary shall--
                            ``(i) impose such terrorism loss risk-
                        spreading premiums beginning with such period 
                        of coverage during the year as the Secretary 
                        determines appropriate, but shall commence 
                        imposition of such premiums not later than 18 
                        months after the occurrence of the act of 
                        terrorism for which such premiums are imposed;
                            ``(ii) base any terrorism loss risk-
                        spreading premium on a percentage of the 
                        premium amount charged for property and 
                        casualty insurance coverage under the policy; 
                        and
                            ``(iii) 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.
                    ``(D) Percentage limitation.--A terrorism loss 
                risk-spreading premium collected on a discretionary 
                basis pursuant to paragraph (7)(D) shall not be less 
                than, on an annual basis, the amount equal to 3 percent 
                of the premium charged for property and casualty 
                insurance coverage under the policy.
                    ``(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.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2016, and Program Years 
thereafter.

SEC. 10. RISK-SHARING MECHANISMS.

    (a) In General.--Section 103(e) (15 U.S.C. 6701 note) is amended by 
adding at the end the following new paragraph:
            ``(9) Risk-sharing mechanisms.--
                    ``(A) Finding; rule of construction.--The Congress 
                finds that it is desirable to encourage the growth of 
                nongovernmental, private market reinsurance capacity 
                for protection against losses arising from acts of 
                terrorism. Therefore, nothing in this title shall 
                prohibit insurers from developing risk-sharing 
                mechanisms (including mutual reinsurance facilities and 
                agreements, use of the capital markets, and insurance-
                linked securities) to voluntarily reinsure terrorism 
                losses between and among themselves that are not 
                subject to reimbursement under this section.
                    ``(B) Establishment of advisory committee.--The 
                Secretary shall appoint an Advisory Committee to--
                            ``(i) encourage the creation and 
                        development of such risk-sharing mechanisms;
                            ``(ii) assist the Secretary and be 
                        available to administer such risk-sharing 
                        mechanisms; and
                            ``(iii) develop articles of incorporation, 
                        bylaws, and a plan of operation for any long-
                        term reinsurance facility authorized or created 
                        in the future.
                    ``(C) Membership.--The Advisory Committee shall be 
                composed of nine members who are directors, officers, 
                or other employees of insurers, reinsurers, or capital 
                market participants that are participating or that 
                desire to participate in such mechanisms, and who are 
                representative of the affected sectors of the insurance 
                industry, including commercial property insurance, 
                commercial casualty insurance, reinsurance, and 
                alternative risk transfer industries.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to the Program Year for the Terrorism Insurance Program 
established by title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) that begins on January 1, 2015, and Program Years 
thereafter.

SEC. 11. REPORTING OF TERRORISM INSURANCE DATA.

    Section 104 (15 U.S.C. 6701 note) is amended by adding at the end 
the following new subsection:
    ``(h) Reporting of Terrorism Insurance Data.--
            ``(1) Authority.--During the Program Year beginning on 
        January 1, 2016, and in each Program Year thereafter, the 
        Secretary shall require insurers participating in the Program 
        to submit to the Secretary such information regarding insurance 
        coverage for terrorism losses of such insurers as the Secretary 
        considers appropriate to analyze the effectiveness of the 
        Program, which shall include information regarding--
                    ``(A) lines of insurance with exposure to such 
                losses;
                    ``(B) premiums earned on such coverage;
                    ``(C) geographical location of exposures;
                    ``(D) pricing of such coverage;
                    ``(E) the take-up rate for such coverage;
                    ``(F) the amount of private reinsurance for acts of 
                terrorism purchased; and
                    ``(G) such other matters as the Secretary considers 
                appropriate.
            ``(2) Reports.--Not later than 6 months after the 
        termination of the Program Year beginning on January 1, 2016, 
        and not later than 6 months after the termination of each 
        Program Year thereafter, the Secretary shall submit a report to 
        the Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate that includes--
                    ``(A) an analysis of the overall effectiveness of 
                the Program;
                    ``(B) an evaluation of any changes or trends in the 
                data collected under paragraph (1);
                    ``(C) an evaluation of whether any aspects of the 
                Program have the effect of discouraging or impeding 
                insurers from providing commercial property casualty 
                insurance coverage or coverage for acts of terrorism;
                    ``(D) an evaluation of the impact of the Program on 
                workers' compensation insurers;
                    ``(E) an evaluation of the impact on availability 
                and affordability of terrorism insurance coverage and 
                fiscal protection of the taxpayers of separate Federal 
                treatment under the Program for nuclear, biological, 
                chemical, and radiological terrorism; and
                    ``(F) in the case of the data reported in paragraph 
                (1)(B), an updated estimate of the total amount earned 
                since the commencement of Program Year 1.
            ``(3) Protection of data.--To the extent possible, the 
        Secretary shall contract with an insurance statistical 
        aggregator to collect the information described in paragraph 
        (1), which shall keep any nonpublic information confidential 
        and provide it to the Secretary in an aggregate form or in such 
        other form or manner that does not permit identification of the 
        insurer submitting such information.
            ``(4) Advance coordination.--Before collecting any data or 
        information under paragraph (1) from an insurer, or affiliate 
        of an insurer, the Secretary shall coordinate with the 
        appropriate State insurance regulatory authorities or their 
        representatives and any relevant government agency or publicly 
        available sources to determine if the information to be 
        collected is available from, and may be obtained in a timely 
        manner by, individually or collectively, such entities. If the 
        Secretary determines that such data or information is 
        available, and may be obtained in a timely matter, from such 
        entities, the Secretary shall obtain the data or information 
        from such entities. If the Secretary determines that such data 
        or information is not so available, the Secretary may collect 
        such data or information from an insurer and affiliates.
            ``(5) Confidentiality.--
                    ``(A) Retention of privilege.--The submission of 
                any non-publicly available data and information to the 
                Secretary and the sharing of any non-publicly available 
                data with or by the Secretary among other Federal 
                agencies, the State insurance regulatory authorities 
                and their collective agents, or any other entities 
                under this subsection shall not constitute a waiver of, 
                or otherwise affect, any privilege arising under 
                Federal or State law (including the rules of any 
                Federal or State court) to which the data or 
                information is otherwise subject.
                    ``(B) Continued application of prior 
                confidentiality agreements.--Any requirement under 
                Federal or State law to the extent otherwise 
                applicable, or any requirement pursuant to a written 
                agreement in effect between the original source of any 
                non-publicly available data or information and the 
                source of such data or information to the Secretary, 
                regarding the privacy or confidentiality of any data or 
                information in the possession of the source to the 
                Secretary, shall continue to apply to such data or 
                information after the data or information has been 
                provided pursuant to this subsection.
                    ``(C) Information-sharing agreement.--Any data or 
                information obtained by the Secretary under this 
                subsection may be made available to State insurance 
                regulatory authorities, individually or collectively 
                through an information-sharing agreement that--
                            ``(i) shall comply with applicable Federal 
                        law; and
                            ``(ii) shall not constitute a waiver of, or 
                        otherwise affect, any privilege under Federal 
                        or State law (including any privilege referred 
                        to in subparagraph (A) and the rules of any 
                        Federal or State court) to which the data or 
                        information is otherwise subject.
                    ``(D) Agency disclosure requirements.--Section 552 
                of title 5, United States Code, including any 
                exceptions thereunder, shall apply to any data or 
                information submitted under this subsection to the 
                Secretary by an insurer or affiliate of an insurer.''.

SEC. 12. DELIVERY OF NOTICES TO POLICYHOLDERS.

    Section 103(b)(2) (15 U.S.C. 6701 note) is amended--
            (1) in subparagraph (B), by striking ``, purchase,''; and
            (2) in subparagraph (C), by striking ``, purchase,''.

SEC. 13. DEFINITION OF CONTROL.

    Paragraph (3) of section 102 (15 U.S.C. 6701 note) is amended--
            (1) by redesignating subparagraphs (A), (B), and (C) as 
        clauses (i), (ii), and (iii), respectively and realigning such 
        clauses, as so redesignated, so as to be indented six ems from 
        the left margin;
            (2) in the matter preceding clause (i) (as so 
        redesignated), by striking ``An entity has'' and inserting the 
        following:
                    ``(A) In general.--An entity has''; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) Rule of construction.--An entity, including 
                any affiliate thereof, does not have control over 
                another entity if, as of the date of the enactment of 
                the TRIA Reform Act of 2014, the entity is acting as an 
                attorney-in-fact, as defined by the Secretary, for the 
                other entity and such other entity is a reciprocal 
                insurer, provided that the entity is not, for reasons 
                other than the attorney-in-fact relationship, defined 
                as having control under subparagraph (A).''.

SEC. 14. ANNUAL STUDY OF SMALL INSURER MARKET COMPETITIVENESS.

    Section 108 (15 U.S.C. 6701 note) is amended by adding at the end 
the following new subsection:
    ``(h) Study of Small Insurer Market Competitiveness.--
            ``(1) In general.--The Secretary shall conduct an annual 
        study of small insurers participating in the Program, and 
        identify any competitive challenges small insurers face in the 
        terrorism risk insurance marketplace, including--
                    ``(A) changes to the market share, premium volume, 
                and policyholder surplus of small insurers relative to 
                large insurers;
                    ``(B) how the property and casualty insurance 
                market for terrorism risk differs between small and 
                large insurers, and whether such a difference exists 
                within other perils;
                    ``(C) the impact of the Program's mandatory 
                availability requirement under section 103(c) and the 
                voluntary opt-out for small insurers;
                    ``(D) the effect of increasing the trigger amount 
                for the Program under section 103(e)(1)(B)(iii)(I) on 
                small insurers;
                    ``(E) the availability and cost of private 
                reinsurance for small insurers; and
                    ``(F) the impact that State workers compensation 
                laws have on small insurers, particularly the impact of 
                mandatory, non-excludable participation and unlimited 
                financial liability.
            ``(2) Timing and report.--The Secretary shall complete the 
        first study under paragraph (1) and submit a report to the 
        Congress setting forth the findings and conclusions of the 
        study not later than June 30, 2016, and shall complete an 
        annual study under paragraph (1) and submit a report regarding 
        such study to the Congress by June 1 annually thereafter.''.

SEC. 15. CBO AND OMB STUDIES REGARDING BUDGETING FOR COSTS OF FEDERAL 
              INSURANCE PROGRAMS.

    Not later than the expiration of the 12-month period beginning on 
the date of the enactment of this Act, the Director of the 
Congressional Budget Office and the Director of the Office of 
Management and Budget shall each--
            (1) conduct a study to determine the feasibility of 
        applying accrual accounting concepts to budgeting for the costs 
        of the Terrorism Risk Insurance Program and for the costs of 
        the other Federal insurance programs; and
            (2) submit a report regarding such study to the Committees 
        on the Budget of the House of Representatives and the Senate, 
        which shall include a recommendation specifically addressing 
        the feasibility of applying fair value concepts to budgeting 
        for the costs of Federal insurance programs, including the 
        Terrorism Risk Insurance Program.

SEC. 16. GAO STUDY ON UPFRONT PREMIUMS AND CAPITAL RESERVE FUND.

    (a) Study.--Not later than 2 years after the date of the enactment 
of this Act, the Comptroller General of the United States shall 
complete a study on the viability of the Federal Government--
            (1) assessing and collecting upfront premiums on insurers 
        that participate in the Terrorism Risk Insurance Program 
        established under the Terrorism Risk Insurance Act of 2002 (15 
        U.S.C. 6701 note) (in this section referred to as the 
        ``Program''), which shall include a comparison of practices in 
        international markets to assess and collect premiums either 
        before or after terrorism losses are incurred; and
            (2) creating a capital reserve fund under the Program and 
        requiring insurers participating in the Program to dedicate 
        capital specifically for terrorism losses before such losses 
        are incurred, which shall include a comparison of practices in 
        international markets to establish reserve funds.
    (b) Required Content.--The study required under subsection (a) 
shall examine, but shall not be limited to, the following issues:
            (1) Upfront premiums.--With respect to upfront premiums 
        described in subsection (a)(1)--
                    (A) how the Federal Government could determine the 
                price of such upfront premiums on insurers that 
                participate in the Program;
                    (B) how the Federal Government could collect such 
                upfront premiums;
                    (C) how the Federal Government could ensure that 
                such upfront premiums are not spent for purposes other 
                than satisfying claims through the Program;
                    (D) how the assessment and collection of such 
                upfront premiums could affect take-up rates for 
                terrorism risk coverage in different regions and 
                industries;
                    (E) the effect of collecting such upfront premiums 
                on the private market for terrorism risk reinsurance; 
                and
                    (F) the size of the Federal Government subsidy 
                insurers currently receive through their participation 
                in the Program.
            (2) Capital reserve fund.--With respect to the capital 
        reserve fund described in subsection (a)(2)--
                    (A) how the creation of a capital reserve fund 
                would affect the Federal Government's fiscal exposure 
                under the Terrorism Risk Insurance Program and the 
                ability of the Program to meet its statutory purposes;
                    (B) how a capital reserve fund would impact 
                insurers and reinsurers, including liquidity, insurance 
                pricing, and capacity to provide terrorism risk 
                coverage;
                    (C) the feasibility of segregating funds 
                attributable to terrorism risk from funds attributable 
                to other insurance lines;
                    (D) how a capital reserve fund would be viewed and 
                treated under current Financial Accounting Standards 
                Board accounting rules and the tax laws; and
                    (E) how a capital reserve fund would affect the 
                States' ability to regulate insurers participating in 
                the Program.
            (3) International practices.--With respect to international 
        markets referred to in paragraphs (1) and (2) of subsection 
        (A), how other countries, if any--
                    (A) have established terrorism insurance 
                structures;
                    (B) charge premiums or otherwise collect funds to 
                pay for the costs of terrorism insurance structures, 
                including risk and administrative costs; and
                    (C) have established capital reserve funds to pay 
                for the costs of terrorism insurance structures.
            (4) Duration.--With respect to the capital reserve fund 
        described in subsection (a)(2), how the duration of the Program 
        would affect the viability of such capital reserve fund.
    (c) Report.--Upon completion of the study required under subsection 
(a), the Comptroller General shall submit a report on the results of 
such study to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of the House of 
Representatives.
    (d) Public Availability.--The study and report required under this 
section shall be made available to the public in electronic form and 
shall be published on the website of the Government Accountability 
Office.
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