[Federal Register Volume 82, Number 227 (Tuesday, November 28, 2017)]
[Notices]
[Pages 56328-56331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25402]
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DEPARTMENT OF THE TREASURY
Terrorism Risk Insurance Program 2018 Data Call
AGENCY: Departmental Offices, U.S. Department of the Treasury.
ACTION: Request for comments.
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SUMMARY: Pursuant to the Terrorism Risk Insurance Act of 2002
(TRIA),\1\ the Federal Insurance Office (FIO) requests public feedback
on the proposed consolidation of the separate federal and state data
calls regarding terrorism risk insurance, and the proposed data
collection forms for use in the 2018 data call. Copies of these forms
and associated explanatory materials (including a document identifying
specific changes to the reporting templates and instructions as
previously used by Treasury) are available for electronic review on the
Treasury Web site at https://www.treasury.gov/resource-center/fin-mkts/Pages/program.aspx. State insurance regulators, through the National
Association of Insurance Commissioners (NAIC), will also be separately
seeking comment from stakeholders on the proposal.
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\1\ Public Law 107-297, 116 Stat. 2322, codified at 15 U.S.C.
6701, note. Because the provisions of TRIA (as amended) appear in a
note, instead of particular sections, of the United States Code, the
provisions of TRIA are identified by the sections of the law.
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DATES: Submit comments on or before January 29, 2018.
ADDRESSES: Submit comments electronically through the Federal
eRulemaking Portal: http://www.regulations.gov, or by mail to the
Federal Insurance Office, Attn: Richard Ifft, Room 1410 MT, Department
of the Treasury, 1500 Pennsylvania Avenue NW., Washington, DC 20220.
Because postal mail may be subject to processing delays, it is
recommended that comments be submitted electronically. If submitting
comments by mail, please submit an original version with two copies.
Comments concerning the proposed data collection forms and
[[Page 56329]]
collection process should be captioned with ``2018 TRIP Data Collection
Comments.'' 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).
FOR FURTHER INFORMATION CONTACT: Richard Ifft, Senior Insurance
Regulatory Policy Analyst, Federal Insurance Office, Room 1410 MT,
Department of the Treasury, 1500 Pennsylvania Avenue NW., Washington,
DC 20220, at (202) 622-2922 (not a toll-free number), Lindsey Baldwin,
Senior Policy Analyst, Federal Insurance Office, at (202) 622-3220 (not
a toll free number), or Kevin Meehan, Senior Insurance Regulatory
Policy Analyst, Federal Insurance Office, at (202) 622-7009 (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 and Proposed Consolidated Approach
TRIA created the Terrorism Risk Insurance Program (Program) within
the U.S. Department of the Treasury (Treasury) to address disruptions
in the market for terrorism risk insurance, to help ensure the
continued 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. The Program has been reauthorized on a
number of occasions, most recently in the Terrorism Risk Insurance
Program Reauthorization Act of 2015 (2015 Reauthorization Act).\2\
Section 111 of the 2015 Reauthorization Act \3\ (Section 111) requires
the Secretary of the Treasury (Secretary) to perform periodic analyses
of certain matters concerning the Program. In order to assist the
Secretary with this process, Section 111 requires insurers to submit on
an annual basis certain insurance data and information regarding their
participation in the Program. FIO is authorized to assist the Secretary
in the administration of the Program.\4\
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\2\ Public Law 114-1, 129 Stat. 3.
\3\ TRIA sec. 104(h).
\4\ 31 U.S.C. 313(c)(1)(D).
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Treasury began collecting data from insurers in 2016 on a voluntary
basis,\5\ and on a mandatory basis in 2017.\6\ Treasury also arranged
in 2017 for workers' compensation rating bureaus to provide most of the
workers' compensation insurance data elements.\7\ 31 CFR 50.51 requires
insurers to submit the specified data no later than May 15 of each
calendar year. Treasury, through an insurance statistical aggregator,
uses a web portal through which insurers must submit the requested
data. All information submitted via the web portal is subject to the
confidentiality and data protection provisions of applicable federal
law.
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\5\ 81 FR 11649 (March 4, 2016).
\6\ A reporting exemption was extended to small insurers that
wrote less than $10 million in TRIP-eligible lines premium in 2016.
See 81 FR 95310 (December 27, 2016); 82 FR 20420 (May 1, 2017).
\7\ 82 FR 20420 (May 1, 2017).
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State insurance regulators also began annually collecting data
relating to terrorism risk insurance in 2016. The state insurance
regulator data calls have sought information similar to that collected
by Treasury, although in some cases on a more detailed, granular basis.
Given the similarity of the information sought, and the burden
presented to insurers by the existence of dual data calls on the same
subject, Treasury and state insurance regulators have sought to create
a consolidated data call for 2018 that will satisfy each of their
respective objectives. For the 2018 data call, Treasury and state
insurance regulators have agreed on joint reporting templates
substantially similar to those used by Treasury in prior years, subject
to minor changes based upon experience gained from the 2017 data call,
coordination with state insurance regulators and the NAIC, and feedback
from participating insurers. The most significant changes are
identified below.
Insurers subject to the consolidated data call will report on a
group basis, if part of a group, and otherwise will report on an
individual company basis. Insurers with property exposures will also be
required to submit to state insurance regulators, on an individual
company basis, an additional supplement focusing on the property lines
of insurance subject to the Program. This supplement calls for data
with respect to geographic exposures by ZIP Code.
II. Changes to Data Collection Templates
Pursuant to Section 111 of the 2015 Reauthorization Act, Treasury
has coordinated with publicly available sources to collect information
for the 2018 data call. Information relating to workers' compensation
exposures is available from the workers' compensation rating bureaus,
and those entities have agreed to provide that information on behalf of
participating insurers. Treasury has determined, however, that all
other data components remain unavailable from other sources.
Accordingly, Treasury will continue to request this remaining data and
information directly from insurers. However, Treasury's analysis
indicates that the proposed consolidated approach for the 2018 data
call will result in a significant reduction in overall data collection
burdens for participating insurers.
After coordinating with state insurance regulators, Treasury again
proposes to use four different data collection templates (see 31 CFR
50.51(c)), depending upon the type of insurer involved. Insurers 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. Such small insurers, captive insurers, and alien
surplus lines insurers are required to complete separate tailored
templates. Each template will be accompanied by separate instructions
providing guidance on each data element.
There are four global changes to the proposed reporting templates
for 2018. First, all reporting templates will now include a standalone
cyber insurance worksheet. Second, the reinsurance worksheet that is
required for non-small insurers, alien surplus lines insurers, and
captive insurers will include a new modeled loss question.\8\ Third,
the exposures worksheet (required for all insurers) will request
information concerning policyholder deductibles and retention amounts,
in addition to insurer exposure under policies subject to the Program.
Fourth, the reporting templates no longer seek premium information on
terrorism risk insurance for years prior to the reporting period.\9\ In
addition to these four changes, the instructions for each reporting
template will contain clarifications on how to report specific data
elements.
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\8\ Small insurers complete a separate reinsurance worksheet
that does not contain a modeled loss question.
\9\ For purposes of future reports, Treasury will use the
information received during the 2017 data call, and continue to
update this information over time as subsequent data calls are
completed.
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There are also a number of changes for specific insurer categories.
For the 2018 data call (requesting insurer data for calendar year
2017), an insurer will qualify as a small insurer if it had both 2016
policyholder surplus and 2016 direct earned premium in the TRIP-
[[Page 56330]]
eligible lines of insurance of less than $700 million.\10\ Small
insurers that had TRIP-eligible direct earned premium of less than $10
million in 2017 will be exempt from the 2018 consolidated TRIP data
call.\11\ Neither captive insurers nor alien surplus lines insurers are
eligible for this reporting exemption.
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\10\ Small insurers are defined in 31 CFR 50.4(z) as insurers
(or an affiliated group of insurers) whose policyholder surplus for
the immediately preceding year is less than five times the Program
Trigger for the current year, and whose TRIP-eligible lines direct
earned premium for the previous year is also five times less than
the Program Trigger. Accordingly, for the 2018 data call, an insurer
qualifies as a small insurer if its 2016 policyholder surplus and
2016 direct earned premium are less than five times the 2017 Program
Trigger of $140 million.
\11\ To the extent an insurer with less than this level of TRIP-
eligible lines direct earned premium is part of a larger group that
is required to report, the insurer must report as part of the group
as a whole, even if it is under the $10,000,000 direct earned
premium threshold on an individual basis. Individual company
information for such entities must also be reported to state
insurance regulators.
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In addition to the global changes identified above, small insurers
will be required to report additional information on standalone
terrorism policies (in addition to the new standalone cyber insurance
policy worksheet). In addition, small insurers will now report their
largest estimated probable maximum loss at a single location, and the
ZIP code of that location, on the reinsurance worksheet. Insurers
defined as small insurers for the 2018 data call will report the same
information to Treasury (on a group basis) and state insurance
regulators (also on a group basis), except with respect to property
coverages, for which insurers will also provide additional reporting on
an individual company basis in the property supplement submitted solely
to state insurance regulators. State insurance regulators will provide
their own guidance regarding the submission of data for the state
property supplement.
In addition to the global changes identified above, non-small
insurers will no longer be required to complete a separate worksheet on
package/multi-line policies. The non-small insurer template should be
completed by insurance groups (or individual insurers not affiliated
with a group) that had either a 2016 policyholder surplus or 2016
direct earned premium in the TRIP-eligible lines of insurance equal to
or greater than $700 million, and are not otherwise captive insurers or
alien surplus lines insurers. Insurers defined as non-small insurers
for the 2018 data call will report the same information to Treasury (on
a group basis) and state insurance regulators (also on a group basis),
except with respect to property coverages. For property coverages,
insurers will also provide additional reporting on an individual
company basis in a property supplement submitted solely to state
insurance regulators. As noted above, state insurance regulators will
provide their own guidance regarding the submission of data for the
state property supplement.
In addition to the global changes identified above, captive
insurers will no longer be required to complete a separate worksheet
for workers' compensation deductible policies, as this information will
now be collected on the general premium worksheet. Captive insurers are
defined in 31 CFR 50.4(g) as insurers licensed under the captive
insurance laws or regulations of any state. As in 2017, captive
insurers that write policies in TRIP-eligible lines of insurance are
required to report in 2018, unless they do not provide their insureds
with any terrorism risk insurance subject to the Program.
The reporting template for alien surplus lines insurers does not
contain changes, other than the global changes identified above. Alien
surplus lines insurers are defined in 31 CFR 50.4(o)(1)(i)(B) as
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. Alien surplus lines insurers that are part of a larger
group classified as a non-small insurer or a small insurer should
report as part of the group, using the appropriate template. Therefore,
the alien surplus lines insurer template should only be used by an
alien surplus lines insurer that is not part of a larger group subject
to the 2018 data call. Insurers defined as alien surplus lines insurers
for the 2018 data call will report their information to Treasury and
provide an identical copy to state insurance regulators.\12\
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\12\ For 2017, state insurance regulators collected terrorism
risk insurance data from alien surplus lines insurers through the
NAIC's International Insurers Department (IID).
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III. Submission of Data
Following registration with the data aggregator, all insurers will
be provided with the appropriate reporting templates for completion.
Insurers will be required to submit the completed reporting templates
through a secure web portal provided by the data aggregator. All data
must be provided no later than May 15, 2018, which will also be the
reporting deadline for state insurance regulators. Treasury intends to
provide training and provide additional resources throughout the data
collection period to facilitate the proper completion of reporting
templates.
To permit greater flexibility in the submission of data, Treasury
will permit the submission of completed reporting templates in .csv
file format, consistent with the format currently used by state
insurance regulators. Treasury will provide further guidance on how
this can be accomplished in a later notice or web posting. Responding
companies may also continue to report using the templates (in Excel
format) used in prior years.
Reporting under the 2018 data call will be mandatory for all
commercial property and casualty insurers writing insurance in lines
subject to TRIA, unless the insurer falls within the exceptions for
certain small insurers and captive insurers identified above.
IV. Request for Comments
To ensure efficient and accurate completion of the forms, Treasury
is requesting public feedback on the content of the 2018 data call
reporting templates, and the consolidated approach to the separate
federal and state reporting outlined in this Request for Comments. The
proposed forms are available for review at https://www.treasury.gov/resource-center/fin-mkts/Pages/program.aspx.
V. Procedural Requirements
Paperwork Reduction Act. The collection of information contained in
this notice will be submitted to the Office of Management and Budget
(OMB) for review under the requirements of the Paperwork Reduction Act,
44 U.S.C. 3507(d). Comments should be sent to Treasury in the form
discussed in the ADDRESSES section of this notice. Comments on the
collection of information should be received by January 29, 2018.
Comments are being sought with respect to the collection of
information in the proposed Terrorism Risk Insurance Program 2018 data
call. Treasury specifically invites comments on: (a) Whether the
proposed collection is responsive to the statutory requirement; (b) the
accuracy of the estimate of the burden of the collections of
information (see below); (c) ways to enhance the quality, utility, and
clarity of the information collection; (d) ways to use automated
collection techniques or other forms of information technology; and (e)
estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to maintain the information.
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Treasury previously analyzed the potential burdens associated with
the 2017 data call. See 81 FR 95310, 95312 (December 27, 2016). The
information sought by Treasury comprises data elements that insurers
currently collect or generate, although not necessarily grouped
together the way in which insurers currently collect and evaluate the
data. Based upon insurer submissions to the 2017 data call, Treasury
estimates that for purposes of the 2018 data call, approximately 100
Program participants will be required to submit the ``Insurer (Non-
Small) Groups or Companies'' data collection form, 200 Program
participants will be required to submit the ``Small Insurer'' form, 400
Program participants will be required to submit the ``Captive Insurer''
form, and 25 Program participants will be required to submit the
``Alien Surplus Lines Insurers'' form.
Each set of reporting templates is expected to incur a different
level of burden. The changes to the proposed data reporting elements in
2018 are not anticipated to have a material impact on Treasury's prior
burden estimates. Treasury anticipates approximately 75 hours will be
required to collect, process, and report the data for each non-small
insurer, approximately 25 hours will be required to collect, process,
and report data for each small insurer, and 50 hours will be required
to collect, process, and report data for each captive insurer and alien
surplus lines insurer. Due to the proposed consolidation of the
separate federal and state data calls, however, the total burden upon
reporting insurers overall (once state and federal obligations are
accounted for) will be materially reduced for most insurers.
Assuming this breakdown, and when applied to the number of
reporting insurers anticipated in light of the experience of the 2017
data call, the estimated annual burden would be 33,750 hours ((100
insurers x 75 hours) + (200 insurers x 25 hours) + (400 insurers x 50
hours) + (25 insurers x 50 hours)). At a blended, fully loaded hourly
rate of $85, the cost would be $2,868,750 across the industry as a
whole, or $6,375 per non-small insurer, $2,125 per small insurer, and
$4,250 each per captive insurer or alien surplus lines insurer.
Steven E. Seitz,
Deputy Director, Federal Insurance Office.
[FR Doc. 2017-25402 Filed 11-27-17; 8:45 am]
BILLING CODE 4810-25-P