[Federal Register Volume 82, Number 82 (Monday, May 1, 2017)]
[Notices]
[Pages 20420-20422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08716]


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DEPARTMENT OF TREASURY


2017 Data Collection Under the Terrorism Risk Insurance Program

AGENCY: Departmental Offices, Department of Treasury.

ACTION: Notice.

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SUMMARY: The Terrorism Risk Insurance Act requires the Secretary of the 
Treasury to collect, from insurers that participate in the Terrorism 
Risk Insurance Program, information regarding insurance coverage for 
terrorism losses. The information is to be used by the Secretary in 
connection with reports analyzing various aspects of the Program. 
Participating insurers are directed to report information identified in 
a series of forms approved by the Office of Management and Budget 
through a web portal that has been established for that purpose. 
Participating insurers are required to respond to this data call, 
subject to certain exceptions identified in this Notice.

DATES: Certain data must be submitted not later than May 15, 2017, with 
the balance of any remaining information to be provided by October 1, 
2017.

ADDRESSES: Participating insurers will submit the identified data after 
registration at a web portal that has been established for this data 
collection. A link to the Web site where participating insurers can 
commence the registration process can be found at https://www.treasury.gov/resource-center/fin-mkts/Pages/program.aspx.

FOR FURTHER INFORMATION CONTACT: Richard Ifft, Senior Insurance 
Regulatory Policy Analyst, Federal Insurance Office, Room 1410, 
Department of Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 
20220, at (202) 622-2922 (this is not a toll-free number), Kevin 
Meehan, Senior Insurance Regulatory Policy Analyst, Federal Insurance 
Office, 202-622-7009 (not a toll free number), or Lindsey Baldwin, 
Senior Policy Analyst, Federal Insurance Office, 202-622-3220 (this is 
not a toll-free number). Persons who have difficulty hearing or 
speaking may access these numbers via TTY by calling the toll-free 
Federal Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    Congress enacted the Terrorism Risk Insurance Act of 2002 (TRIA) 
\1\ based, in part, upon its recognition that widespread unavailability 
of terrorism risk insurance ``could seriously hamper ongoing and 
planned construction, property acquisition, and other business 
projects, generate a dramatic increase in rents, and otherwise suppress 
economic activity.'' \2\ TRIA requires insurers to make coverage 
available for certain lines of commercial property and casualty 
insurance.\3\ To assist insurers with the financial exposure resulting 
from this required offer of coverage, TRIA established the Terrorism 
Risk Insurance Program (TRIP or Program), under which certain losses 
resulting from an ``act of terrorism'' (as defined by TRIA) are 
eligible for reimbursement through the Program. The Program is 
administered in the Department of Treasury (Treasury) by the Secretary 
of the Treasury (Secretary) with the assistance of the Federal 
Insurance Office.\4\
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    \1\ 15 U.S.C. 6701 note. Because the provisions of TRIA, as 
amended, appear in a note of the United States Code, references to 
the provisions of TRIA are identified by the sections of the law 
(e.g., ``TRIA section 102(1) (definition of an `act of 
terrorism')'').
    \2\ TRIA section 101(a)(5).
    \3\ See TRIA section 103(c).
    \4\ 31 U.S.C. 313(c)(1)(D).
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    TRIA originally authorized the Program for a three-year period 
ending December 31, 2005. The Program has since been reauthorized three 
times, most recently in the Terrorism Risk Insurance Program 
Reauthorization Act of 2015 (2015 Reauthorization Act),\5\ which 
extended the Program until December 31, 2020. Among other reforms and 
changes, the 2015 Reauthorization Act requires insurers participating 
in the Program to submit to the Secretary, beginning in calendar year 
2016, ``such information regarding insurance coverage for terrorism 
losses of such insurers as the Secretary considers appropriate to 
analyze the effectiveness of the Program . . . .'' This information and 
data includes information regarding: (1) Lines of insurance with 
exposure to such losses; (2) premiums earned on such coverage; (3) 
geographical location of exposures; (4) pricing of such coverage; (5) 
the take-up rate for such coverage; (6) the amount of private 
reinsurance for acts of terrorism purchased; and (7) such other matters 
as the Secretary considers appropriate.\6\
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    \5\ Pub. L. 114-1, 129 Stat. 3.
    \6\ TRIA section 104(h)(1) (2015 Reauthorization Act, Section 
111).
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    Treasury conducted a voluntary data call in 2016, to avoid 
inadvertently imposing an unanticipated level of burden on 
participating insurers. In that year, before implementing regulations 
were effective, Treasury utilized a single reporting template approved 
by the Office of Management and Budget (OMB) on an emergency basis 
without a formal public notice and comment period. Data collected from 
the insurers that elected to respond to this request formed the basis 
for Treasury's first report under the 2015 Reauthorization Act 
addressing the effectiveness of the Program.\7\
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    \7\ See Department of Treasury, Report on the Overall 
Effectiveness of the Terrorism Risk Insurance Program (June 2016), 
available at https://www.treasury.gov/initiatives/fio/reports-and-notices/Documents/2016_TRIP_Effectiveness_%20Report_FINAL.pdf.
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    On December 21, 2016, Treasury issued Final Rules concerning, among 
other things, its data collection authorities under the Program.\8\ On 
December 27, 2016, Treasury published the data collection forms that it 
proposed to use for the 2017 data call, and invited the public to 
provide comments concerning those proposed forms.\9\ Treasury received 
seven comments concerning the forms.\10\ In response, and as discussed 
further below, Treasury has made a number of modifications to the forms 
and has also in certain ways modified the manner in which Treasury will 
collect the identified data. OMB has approved the use of these forms 
under Control Number 1505-0257.
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    \8\ 81 FR 93756 (Dec. 21, 2016); see 31 CFR 50.50-50.54.
    \9\ 81 FR 95310 (Dec. 27, 2016).
    \10\ Treasury received comments from the American Insurance 
Association (AIA), the Property Casualty Insurers Association of 
American (PCIAA), the National Association of Mutual Insurance 
Companies (NAMIC), the International Underwriting Association of 
London (IUA), Lloyd's of London (Lloyd's), Signal Mutual Indemnity 
Association Ltd. (Signal), and an individual, James Murray (Murray). 
The comments are available at https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&D=TREAS-TRIP-2017-0002. References to these comments are incorporated below where 
appropriate.
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II. Data Collection Forms and Procedures

    The collection templates proposed for use in calendar year 2017 are 
based upon the form created for use in calendar year 2016, although 
certain changes were made based upon experience derived from the 2016 
voluntary data call. The principal

[[Page 20421]]

change was that Treasury developed four separate templates for use, 
depending upon the type or size of insurer providing information. Each 
insurer group (or individual company if not affiliated with a group) 
will fill out the template identified ``Insurer (Non-Small) Groups or 
Companies,'' unless the insurer meets the definition of a small 
insurer, captive insurer, or alien surplus lines insurer as set forth 
in 31 CFR 50.4. These insurers are required to complete different forms 
that are more specifically tailored to their operations.
    Each form is accompanied by a separate ``data dictionary'' 
applicable to the form, which contains specific instructions to 
complete each data element. In its initial notice seeking public 
comment, Treasury set forth the general instructions concerning what 
type of form each participating insurer must complete.\11\ These 
instructions remain the same; however, Treasury is now clarifying that 
insurers that participate in the Program because they have been 
authorized by the Federal Government to provide insurance for various 
purposes \12\ should complete the alien surplus lines template. 
Treasury has provided further specific instructions in the associated 
data dictionary concerning completion of the reporting template by 
these insurers.
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    \11\ See 81 FR 95310 (Dec. 27, 2016). In general, small insurers 
(31 CFR 50.4(z)) are insurers who for purposes of the 2017 data 
collection, which is otherwise requesting information from calendar 
year 2016, had 2015 policyholder surplus and 2015 direct earned 
premium of less than $600,000,000 (or five times the 2016 Program 
Trigger of $120,000,000). In addition, a small insurer with less 
than $10,000,000 in TRIP-eligible lines direct earned premium in 
calendar year 2016 is not required to provide any data. Captive 
insurers (31 CFR 50.4(g)) are insurers licensed under the captive 
insurance laws or regulations of any state, and are all subject to 
the same captive insurer template regardless of size. However, to 
the extent a captive insurer writes policies in TRIP-eligible lines 
of insurance, but does not actually provide its insureds with any 
terrorism risk insurance subject to the Program, the captive insurer 
is not required to provide data. Alien surplus lines insurers (31 
CFR 50.4(o)(1)(i)(B)) are insurers not licensed or admitted to 
engage in the business of providing primary or excess insurance in 
any state, but that are eligible surplus line insurers listed on the 
NAIC Quarterly Listing of Alien Insurers. To the extent an alien 
surplus lines insurer is part of a larger group that is subject to 
reporting under either the ``Insurer (Non-Small) Groups or 
Companies'' or ``Small Insurers'' template, the information for that 
alien surplus lines insurer should be reported as part of the larger 
group, using the proper template. The ``Alien Surplus Lines'' 
template is to be used by any other alien surplus lines insurer, 
regardless of size, that is not part of a larger group. Such alien 
surplus lines insurers must report, at least for calendar year 2017, 
even if they fall within the $10,000,000 premium threshold otherwise 
required for small insurers to report.
    \12\ See TRIA, Sec.  102(6)(A)(iii); 31 CFR 50.4(o)(1)(C). The 
Alien Surplus Lines template should also be used by Federally-
approved insurers subject to the Program that are approved or 
accepted for the purpose of offering property and casualty insurance 
by a Federal agency in connection with maritime, energy, or aviation 
activity, but only to the extent of such Federal approval of 
property and casualty insurance coverage offered by the insurer in 
connection with maritime, energy, or aviation activity.
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    Commenters made a number of suggestions concerning the manner in 
which data should be collected and provided specific suggestions 
concerning individual data elements and the instructions concerning 
those elements. Several commenters \13\ suggested that Treasury could 
collect certain workers' compensation insurance elements through the 
National Council on Compensation Insurance (NCCI) and other rating 
bureaus that collect workers' compensation insurance data in order to 
fulfill the obligation of participating insurers to report such 
information. In response to these comments, Treasury has arranged with 
NCCI and the California Workers' Compensation Insurance Rating Bureau 
(California WCIRB) to provide (either directly or through other 
workers' compensation rating bureaus) the workers' compensation 
insurance elements of the data call relating to premium and payroll 
information, including as allocated to specific geographic areas and 
across industry groups, with the exception of private reinsurance 
arrangements associated with workers' compensation insurance. This will 
eliminate the need of insurers to report this information separately, 
and the data aggregator will provide such insurers with reporting 
templates that do not require completion of this workers' compensation 
data. Instead, that information will be provided by NCCI and/or the 
California WCIRB and then merged into the information provided directly 
by the reporting insurers.
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    \13\ See AIA Comments at 4; PCIAA Comments at 2; NAMIC Comments 
at 1.
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    Several commenters requested that Treasury delay the data 
collection deadline. In support of this request, commenters cited the 
fact that this is the first year of mandatory collection, and that a 
delayed reporting date would allow insurers more time to verify and 
compile information, leading to more accurate submissions.\14\ 
Commenters supported the permissibility of this position by noting that 
Treasury's report in 2017 focuses upon small insurers, and that 
information required from other insurers would not be relevant to that 
report such that it could be reported at a later date.\15\
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    \14\ See Lloyd's Comments at 1; IUA Comments at 1-2.
    \15\ See Lloyd's Comments at 1; IUA Comments at 1-2; Murray 
Comments at 1. One commenter suggested that a later date would be 
consistent with a reporting date of October 1 that has been 
established for the reporting to state regulators of certain 
terrorism risk insurance information by alien surplus lines 
insurers. See Lloyd's Comments at 1; IUA Comments at 1.
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    Treasury selected the data reporting deadline of May 15 in the 
Program Rules in response to comments indicating that the initial 
proposed date of March 1 interfered with pre-existing state insurance 
data production requirements. Treasury chose May 15 as the latest date 
to obtain the necessary data and still reasonably complete its 
statutory reporting obligations, which are due each year on June 
30.\16\ Even though Treasury's 2017 report will be focusing upon small 
insurers, information provided by other insurers will be relevant to 
put into context the participation of small insurers in the terrorism 
risk insurance marketplace.
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    \16\ See 81 FR 93756, 93761 (Dec. 21, 2016).
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    To address the concerns raised by commenters while still meeting 
its statutory obligations, Treasury will, for 2017 only, limit the 
amount of data that needs to be provided by May 15, 2017 by all 
insurers to general registration, premium and policy counts, policy 
exposures, and reinsurance (the information that is reportable by small 
insurers).\17\ Additional information (for package or multi-line 
policies, standalone terrorism insurance, policyholder industry codes, 
and geographic exposures) must also be submitted by insurers other than 
small insurers, and may be submitted with the initial submission by May 
15. If this additional information is not provided with the initial 
submission, it must be provided separately no later than October 1, 
2017. Because all insurers will have taken the necessary steps to 
compile data in 2017, Treasury will not grant extensions of the May 15 
deadline in future years.
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    \17\ The worksheets for non-small insurers, alien surplus lines 
insurers, and captive insurers that cover the information that is 
also reported by small insurers differ from the small insurer 
worksheets in minor ways. Reporting insurers will still complete the 
relevant worksheets of their own data reporting template, even 
though it will differ somewhat from the small insurer template.
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    One commenter suggested that the reporting forms were not geared to 
reporting by Federally-approved insurers that are subject to the 
Program.\18\ In response, and as noted above, Treasury has modified the 
instructions to provide further guidance as to how such insurers should 
respond to the 2017 data call, and will consider the development of a 
separate form for such insurers for future collections.
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    \18\ See Signal Comments at 1.
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    Several commenters suggested the establishment of a telephone 
``helpline''

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and the hosting of a public webinar to assist reporting insurers that 
have questions concerning the data collection requirements.\19\ 
Treasury (through its data aggregator) will establish such a helpline, 
and will also host a public webinar concerning the process to assist 
reporting insurers in responding to the proposed collection. Details 
concerning participation in the webinar will be made available on 
Treasury's Web site at https://www.treasury.gov/resource-center/fin-mkts/Pages/program.aspx. Treasury personnel, as identified above, may 
also be contacted directly in connection with questions and guidance 
for completion of the data collection templates.
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    \19\ See AIA Comments at 4; PCIAA Comments at 2.
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    Treasury also received a number of written comments addressing 
technical changes or questions concerning the reporting forms. In 
response, Treasury has modified the instructions in a number of ways to 
clarify the information sought, and in some cases to reduce the burden 
of reporting that might otherwise be presented by the collection as 
originally proposed (for example, by adding fields to allow insurers to 
report unallocated values that have not been specifically coded within 
the insurer's existing systems).\20\
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    \20\ Other examples of such technical changes include manner in 
which policy count information should be entered in connection with 
multiple line and multiple jurisdiction situations (see AIA Comments 
at 4-5), confirmation as to how property insurance limits should be 
entered in specific situations (see AIA Comments at 6), and 
inconsistency in certain of the template headings vis-[agrave]-vis 
the instructional materials (see AIA Comments at 5).
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III. Data Call

    Treasury, through an insurance statistical aggregator, has 
established the web portal identified above, through which insurers 
will be able to submit the identified data. Reporting insurers should 
visit this link in order to register for the 2017 data collection. 
Copies of the collection forms (image files only) are also available at 
the link identified above; however, reporting insurers will obtain the 
fillable forms that they will use for reporting directly from the data 
aggregator once they register for the data collection process. As noted 
above, reporting insurers are required to submit completed data forms 
containing data related to premium and policy counts, policy exposures, 
and reinsurance no later than May 15, 2017; the remaining data 
requested must be submitted no later than October 1, 2017. The 
insurance statistical aggregator will provide instructions on how to 
submit completed forms, and will also be available to answer questions 
related to the completion of the forms.
    All information submitted via the web portal is subject to the 
confidentiality and data protection provisions of TRIA and the Program 
Rules, as well as to section 552 of title 5, United States Code, 
including any exceptions thereunder. In accordance with the Paperwork 
Reduction Act, (44 U.S.C 3501 et seq.), the information collected 
through the web portal has been approved by OMB under Control Number 
1505-0257. An agency may not conduct or sponsor and a person is not 
required to respond to a collection of information unless it displays a 
valid OMB control number.

    Dated: April 25, 2017.
Brian J. Peretti,
Director, Office of Critical Infrastructure Protection and Compliance 
Policy.
[FR Doc. 2017-08716 Filed 4-28-17; 8:45 am]
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