[Federal Register Volume 78, Number 136 (Tuesday, July 16, 2013)]
[Notices]
[Pages 42588-42589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-16977]


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DEPARTMENT OF THE TREASURY


Report by the President's Working Group on Financial Markets on 
the Long-Term Availability and Affordability of Insurance for Terrorism 
Risk

AGENCY: Department of the Treasury, Departmental Offices.

ACTION: Notice; Request for comments.

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SUMMARY: The Terrorism Risk Insurance Act of 2002 (TRIA),\1\ as amended 
by Section 5(c) of the Terrorism Risk Insurance Program Reauthorization 
Act of 2007,\2\ requires the President's Working Group on Financial 
Markets (President's Working Group) to perform an ongoing analysis of, 
and to submit a report to Congress \3\ on, the long-term availability 
and affordability of insurance for terrorism risk. The Secretary of the 
Treasury, or his designee, chairs the President's Working Group. The 
Department of the Treasury (Treasury) issues this notice seeking public 
comment to assist the President's Working Group in its report.
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    \1\ Pub. L. 107-297, 116 Stat. 2322, 15 U.S.C. 6701 note.
    \2\ Pub. L. 110-160, 121 Stat. 1839, 1842.
    \3\ The report is to be submitted to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives.

DATES: Comments must be in writing and received by September 16, 2013. 
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Early submissions are encouraged.

ADDRESSES: Please submit comments electronically through the Federal 
eRulemaking Portal: http://www.regulations.gov, or by mail (if hard 
copy, preferably an original and two copies) to the Federal Insurance 
Office, Attention: Kevin Meehan, Room 1319 MT, Department of the 
Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220. Because 
postal mail may be subject to processing delay, it is recommended that 
comments be submitted electronically. All comments should be captioned 
with ``President's Working Group on Financial Markets: Terrorism Risk 
Insurance Analysis.'' Please include your name, group affiliation, 
address, email address and telephone number(s) in your comment. Where 
appropriate, a comment should include a short Executive Summary (no 
more than five single-spaced pages).
    In general, comments received will be posted on http://www.regulations.gov without change, including any business or personal 
information provided. Comments received, including attachments and 
other supporting materials, will be part of the public record and 
subject to public disclosure. Do not enclose any information in your 
comment or supporting materials that you consider confidential or 
inappropriate for public disclosure.

FOR FURTHER INFORMATION CONTACT: Kevin Meehan, Policy Advisor, Federal 
Insurance Office, 202-622-7009 (not a toll free number).

SUPPLEMENTARY INFORMATION:

I. Background

    TRIA was enacted to address disruptions in the market for insurance 
for terrorism risk, to help ensure the continued widespread 
availability and affordability of commercial property and casualty 
insurance for terrorism risk, and to allow for the private markets to 
stabilize and build insurance capacity to absorb any future losses for 
terrorism events. Title I of TRIA creates the Terrorism Risk Insurance 
Program (Program) that provides shared public and private compensation 
for privately insured commercial property and casualty losses resulting 
from certified acts of terrorism. Pursuant to TRIA, the Secretary of 
the Treasury administers the Program. The Federal Insurance Office 
assists the Secretary in administering the Program, as authorized by 
the Dodd-Frank Wall Street Reform and Consumer Protection Act.\4\ The 
Program is scheduled to expire on December 31, 2014.
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    \4\ 31 U.S.C. 313(c)(1)(D).
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    TRIA was originally set to terminate on December 31, 2005. The 
Terrorism Risk Insurance Extension Act of 2005 \5\ extended the Program 
for two additional years, with expiration set for December 31, 2007. 
Section 108(e) of TRIA, as amended by the Terrorism Risk Insurance 
Extension Act of 2005, required the President's Working Group to issue 
a report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives about the long-term availability and affordability of 
terrorism risk, including group life coverage and coverage for nuclear, 
biological, chemical, and radiological events.\6\ The President's 
Working Group issued its report in September 2006.\7\
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    \5\ Public Law 109-144, 119 Stat. 2660.
    \6\ The President's Working Group is composed of the Secretary 
of the Treasury, the Chairman of the Board of Governors of the 
Federal Reserve System, the Chairman of the Securities and Exchange 
Commission, and the Chairman of the Commodity Futures Trading 
Commission (or their respective designees). The Secretary of the 
Treasury, or his designee, is the Chairman of the President's 
Working Group. Exec. Order 12,631, 53 FR 9421 (Mar. 18, 1988).
    \7\ President's Working Group, Terrorism Risk Insurance (2006), 
available at http://www.treasury.gov/resource-center/fin-mkts/Documents/report.pdf.

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[[Page 42589]]

    The Terrorism Risk Insurance Program Reauthorization Act of 
2007,\8\ in relevant part, further extended the Program through 
December 31, 2014, and amended section 108 of TRIA to require an 
ongoing analysis regarding the long-term availability and affordability 
of insurance for terrorism risk. The President's Working Group 
subsequently submitted a report updating its analysis in 2010 \9\ and 
is required to submit another report by September 30, 2013. The 
analysis performed by the President's Working Group is to be done in 
consultation with the National Association of Insurance Commissioners, 
representatives of the insurance industry, representatives of the 
securities industry, and representatives of policy holders.\10\ 
Treasury seeks comment from these and any other interested parties to 
assist the President's Working Group in drafting the forthcoming 
report.
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    \8\ Public Law 110-160, 121 Stat. 1839.
    \9\ President's Working Group, Market Conditions for Terrorism 
Risk Insurance (2010), available at http://www.treasury.gov/resource-center/fin-mkts/Documents/PWG%20Report%20Final%20January%2013.pdf.
    \10\ Public Law 109-144, 119 Stat. 2662 (adding subsection (e) 
to section 108 of TRIA).
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II. General Solicitation for Comments

    Treasury solicits comments on behalf of the President's Working 
Group, including information in support of such comments where 
appropriate and available, regarding the long-term availability and 
affordability of insurance for terrorism risk since 2010, when the 
President's Working Group issued its last report. Identify and explain 
any and all factors relating to the availability and affordability of 
terrorism insurance, and particularly how these factors have affected 
the availability and affordability of terrorism insurance since 2010.

III. Solicitation for Specific Comments

TRIA Termination Considerations

    (1) Describe and explain in detail any and all possible 
ramifications from the termination of the Program on December 31, 2014, 
including any available evidence to support the predicted result, 
regarding:
    (a) The availability and affordability of insurance for terrorism 
risk in the United States generally;
    (b) The availability and affordability of insurance for terrorism 
risk in the United States specifically by line of business; geographic 
location, including the rating tiers defined by the Insurance Services 
Office, Inc.; and other relevant characteristics; and
    (c) Additional specific effects on commerce in the United States.
    (2) If the Program were to continue beyond December 31, 2014, 
describe and explain in detail any revisions or modifications to the 
Program that would promote the availability and affordability of 
terrorism insurance, including any accompanying challenges that might 
arise from any proposed revisions or modifications to the Program. All 
views regarding the appropriate role of the federal government in 
supporting the availability and affordability of insurance for 
terrorism risk are welcome.

Insurance Market Considerations

    (3) Describe and explain the ability of the insurance industry to 
model, quantify, and underwrite terrorism risk, and the resulting 
impact of such analysis on the availability and affordability of 
terrorism insurance, including an examination of the price (by line of 
business, location of risk, and other relevant characteristics) and 
coverage options for terrorism insurance.
    (4) Describe and explain, with supporting information where 
available, any additional insurance market considerations that could 
impact the long-term availability and affordability of terrorism 
insurance (e.g. implications for coverage of insurance for nuclear, 
biological, chemical, and radiological acts of terrorism; cyber acts of 
terrorism; and terrorism in workers' compensation policies).
    (5) Explain and describe in general the demand (or ``take-up'') of 
terrorism insurance and provide specific data and information, where 
available, regarding the take-up rate by line of business, location of 
the risk, and other relevant characteristics.

Reinsurance Considerations

    (6) Describe and explain in detail the long-term availability and 
affordability of private reinsurance for terrorism risk. Analyze, with 
supporting information, the impact of the Program, and any changes to 
the Program, on the private reinsurance market for terrorism risk, 
including any accompanying challenges that might arise from revisions 
or modifications to the Program.

Additional Consideration

    (8) Describe and explain any other developments, considerations, or 
market issues that might affect the long-term availability and 
affordability of terrorism risk insurance.

IV. Further Consultation

    In addition to the consultation facilitated through this request 
for comment, the President's Working Group may continue to consult with 
interested parties through meetings, public discussions, or further 
written comment.

    Dated: July 10, 2013.
Michael T. McRaith,
Director, Federal Insurance Office.
[FR Doc. 2013-16977 Filed 7-15-13; 8:45 am]
BILLING CODE 4810-25-P