[House Report 110-475]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-475

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  PROVIDING FOR THE CONSIDERATION OF THE SENATE AMENDMENT TO THE BILL 
(H.R. 2761) TO EXTEND THE TERRORISM INSURANCE PROGRAM OF THE DEPARTMENT 
                OF THE TREASURY, AND FOR OTHER PURPOSES

                                _______
                                

  December 6, 2007.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

    Mr. Arcuri, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 849]

    The Committee on Rules, having had under consideration 
House Resolution 849, by a non-record vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of the Senate 
amendment to H.R. 2761, the Terrorism Risk Insurance Revision 
and Extension Act of 2007. The resolution makes in order a 
motion by the Chairman of the Committee on Financial Services 
to concur in the Senate amendment with the House amendment 
printed in this report. The resolution waives all points of 
order against the motion except clause 10 of rule XXI. The 
resolution provides that the Senate amendment and the motion 
shall be considered as read. The resolution provides one hour 
of debate on the motion equally divided and controlled by the 
chairman and ranking minority member of the Committee on 
Financial Services. The resolution further provides that the 
Chair may postpone further consideration of the motion to a 
time designated by the Speaker.

                         EXPLANATION OF WAIVERS

    Although the rule waives all points of order against 
consideration of the motion (except for clause 10 of rule XXI) 
the Committee is not aware of any points of order against the 
motion. The waiver of all points of order against the motion is 
prophylactic in nature.

  SUMMARY OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TO H.R. 2761

    The amendment incorporates the entirety of the Senate 
amendment to H.R. 2761, and adds certain provisions from the 
original House-passed H.R. 2761.
    The amendment adds group life to TRIA's covered lines, and 
creates a separate $5 billion recoupment pool for group life. 
Property and casualty insurance would retain its separate $27.5 
billion recoupment pool. The amendment also caps the level of 
Federal exposure at $1 million per certificate holder under any 
group life insurance policy.
    The amendment provides that for an act of terrorism 
resulting in aggregate industry insured losses exceeding $1 
billion, the deductible that would apply to insurers affected 
by that particular $1 billion or greater act of terrorism 
decreases to the following percentage: 5% if such act occurs in 
2008, 5.5% if such act occurs in 2009, and increasing by 50 
basis points each additional Program Year. However, such 
percentage will reset to 5% in the Program Year following a $1 
billion or greater act of terrorism, and start increasing again 
by 50 basis points each subsequent additional Program Year. The 
Secretary may combine multiple acts of terrorism in the same 
Program Year in the same geographic area for determining 
whether the $1 billion threshold has been exceeded. In 
addition, the trigger will decrease to $5 million if a 
certified act of terrorism occurs for which resulting aggregate 
industry insured losses exceed $1 billion.
    Also, the amendment adds other provisions including 
lowering the trigger from $100 million to $50 million 
generally, and clarifies that the provisions of the bill will 
apply beginning on January 1, 2008.

    TEXT OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TO H.R. 2761

  At the end of the matter proposed to be inserted by the 
amendment of the Senate, insert the following:

SEC. 6. COVERAGE OF GROUP LIFE INSURANCE.

  (a) Findings and Purpose.--Section 101 of the Terrorism Risk 
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
          (1) in subsection (a)--
                  (A) in paragraph (5), by striking ``and'' at 
                the end;
                  (B) by redesignating paragraph (6) as 
                paragraph (8); and
                  (C) by inserting after paragraph (5) the 
                following new paragraphs:
          ``(6) 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;
          ``(7) 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 terrorism risks 
        while most catastrophic reinsurance does exclude such 
        risks, and because a large-scale loss of life would 
        fall outside of actuarial expectations of death; and''; 
        and
          (2) in subsection (b)(1), by inserting ``and group 
        life insurance'' after ``property and casualty 
        insurance''.
  (b) Definitions.--Section 102 of the Terrorism Risk Insurance 
Act of 2002 (15 U.S.C. 6701 note), as amended by the preceding 
provisions of this Act, is further amended--
          (1) in paragraph (1)(B)(ii), by inserting ``and group 
        life insurance'' before ``losses'';
          (2) in paragraph (5), in the matter preceding 
        subparagraph (A)--
                  (A) by inserting ``, or group life insurance 
                to the extent of the amount at risk,'' after 
                ``property and casualty insurance'';
                  (B) by inserting a comma after ``insurer''; 
                and
                  (C) by adding after and below subparagraph 
                (B) the following:
        ``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).'';
          (3) in paragraph (6)--
                  (A) in subparagraph (A)(i), by inserting ``, 
                or group life insurance,'' after ``excess 
                insurance''; and
                  (B) in subparagraph (B), by inserting ``or, 
                in the case of group life insurance, that 
                receives direct premiums,'' after ``insurance 
                coverage,'';
          (4) in paragraph (7)--
                  (A) in subparagraph (F)--
                          (i) by striking the first comma and 
                        inserting ``(i) with respect to 
                        property and casualty insurance,''; and
                          (ii) by inserting before the 
                        semicolon the following: ``(ii) with 
                        respect to group life insurance, the 
                        value of an insurer's amount at risk 
                        for a covered line of insurance over 
                        the calendar year immediately preceding 
                        such Program Year, multiplied by 0.0351 
                        percent'';'';
                  (B) in subparagraph (G)--
                          (i) by inserting ``with respect to 
                        property and casualty insurance, and 
                        such portion of the amounts at risk 
                        with respect to group life insurance,'' 
                        after ``such portion of the direct 
                        earned premiums''; and
                          (ii) by inserting ``and amounts at 
                        risk'' after ``such direct earned 
                        premiums'';
          (5) by redesignating paragraph (16) as paragraph 
        (18); and
          (6) by inserting after paragraph (15) the following 
        new paragraphs:
          ``(16) 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.
          ``(17) 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 (5).''.
  (c) Mandatory Availability.--Section 103(c) of the Terrorism 
Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended by 
striking ``During each Program Year'' and all that follows 
through ``property and casualty insurance'' in paragraph (2) 
and inserting the following:
          ``(1) Availability of coverage for insured losses.--
        During each Program Year, each entity that meets the 
        definition of an insurer under section 102 shall make 
        available, in all of its insurance policies for 
        property and casualty insurance and in all of its 
        insurance policies for group life insurance,''.
  (d) Federal Share of Compensation.--Section 103(e)(1) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is 
amended by adding at the end the following new subparagraph:
                  ``(D) Limitation on compensation for group 
                life insurance.--Notwithstanding any other 
                provision of this Act, the Federal share of 
                compensation under the Program paid 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 Program Year exceed $1,000,000.''.
  (e) Separate Retention Pool.--Section 103(e)(6)(E) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is 
amended by striking clauses (i) and (ii) and inserting the 
following new clauses:
                          ``(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.''.
  (f) Separate Recoupment.--Section 103(e)(7) of the Terrorism 
Risk Insurance Act of 2002 (15 U.S.C. 6701 note), as amended by 
the preceding provisions of this Act, is further amended--
          (1) in subparagraph (A)--
                  (A) in clause (i), by inserting 
                ``applicable'' before ``insurance''; and
                  (B) in clause (ii), by striking ``all 
                insurers'' and inserting ``all applicable 
                insurers (pursuant to subparagraph (G))'';
          (2) in subparagraph (B)--
                  (A) in the heading, by inserting 
                ``applicable'' before ``insurance''; and
                  (B) by inserting ``applicable'' before 
                ``insurance''; and
          (3) by adding at the end the following new 
        subparagraph:
                  ``(G) 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.''.
  (g) Policy Surcharge for Terrorism Loss Risk-Spreading 
Premiums.--Section 103(e)(8) of the Terrorism Risk Insurance 
Act of 2002 (15 U.S.C. 6701 note) is amended--
          (1) in subparagraph (A)--
                  (A) in the matter preceding clause (i), by 
                striking ``Any'' and inserting ``Subject to 
                paragraph (7)(G), any'';
                  (B) in clause (i), by inserting ``and group 
                life insurance policies'' after ``policies''; 
                and
                  (C) by striking clause (iii) and inserting 
                the following new clause:
                          ``(iii) be based on--
                                  ``(I) a percentage of the 
                                premium amount charged for 
                                property and casualty insurance 
                                coverage under the policy; and
                                  ``(II) a percentage of the 
                                amount at risk for group life 
                                insurance coverage under the 
                                policy.''; and
          (2) in subparagraph (C)--
                  (A) by inserting ``with respect to property 
                and casualty insurance,'' after ``annual 
                basis,''; and
                  (B) by inserting before the period at the end 
                the following: ``and, with respect to group 
                life insurance, the amount equal to 0.0053 
                percent of the amount at risk for covered lines 
                under the policy''.

SEC. 7. LARGE EVENT RESET.

  The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 
note) is amended--
          (1) in section 102(7)--
                  (A) in subparagraph (F), by striking ``and'' 
                at the end;
                  (B) in subparagraph (G), by striking the 
                period at the end and inserting ``; and''; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(H) notwithstanding subparagraph (F)(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 Program Year consisting 
                        of calendar year 2008 shall be 5 
                        percent; and
                          ``(ii) for each Program Year 
                        thereafter, shall be 50 basis points 
                        greater than the percentage applicable 
                        to the preceding Program Year, except 
                        that if an act of terrorism occurs 
                        during any such Program Year that 
                        results in aggregate industry insured 
                        losses exceeding $1,000,000,000, the 
                        percentage for the succeeding Program 
                        Year shall be 5 percent and the 
                        increase under this clause shall apply 
                        to 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 (F)(i) shall apply.''; and
          (2) in section 103(e)(1)(B)--
                  (A) in clause (ii), by striking the period at 
                the end and inserting a semicolon; and
                  (B) by adding after and below clause (ii) the 
                following:
                ``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).''.

SEC. 8. AVAILABILITY OF LIFE INSURANCE WITHOUT REGARD TO LAWFUL FOREIGN 
                    TRAVEL.

  Section 103(c) of the Terrorism Risk Insurance Act of 2002 
(15 U.S.C. 6701 note), as amended by the preceding provisions 
of this Act, is further amended by adding at the end the 
following new paragraph:
          ``(2) 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 and any other entity that issues 
        insurance contracts that provide life insurance 
        coverage shall make available, in all of its life 
        insurance policies issued after the date of the 
        enactment of the Terrorism Risk Insurance Program 
        Reauthorization 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 foreign destination 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.''.

SEC. 9. PROGRAM TRIGGER.

  Section 103(e)(1)(B)(ii) of the Terrorism Risk Insurance Act 
of 2002 (15 U.S.C. 6701 note) is amended by striking 
``$100,000,000'' and inserting ``$50,000,000''.

SEC. 10. APPLICABILITY.

  The amendments made by this Act shall apply beginning on 
January 1, 2008. The provisions of the Terrorism Risk Insurance 
Act of 2002, as in effect on the day before the date of the 
enactment of this Act, shall apply through the end of December 
31, 2007.

                                  
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