[Federal Register Volume 83, Number 66 (Thursday, April 5, 2018)]
[Notices]
[Pages 14718-14721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06996]


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DEPARTMENT OF THE TREASURY


2018 Data Call Under the Terrorism Risk Insurance Program

AGENCY: Departmental Offices, U.S. Department of the Treasury.

ACTION: Data Collection.

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SUMMARY: Pursuant to the Terrorism Risk Insurance Act of 2002 
(TRIA),\1\ as amended, insurers that participate in the Terrorism Risk 
Insurance Program (TRIP or Program) are directed to submit information 
for the 2018 TRIP Data Call for the reporting period from January 1, 
2017 to December 31, 2017. Participating insurers are directed to 
register and report information in a series of forms available on the 
TRIP website. All insurers writing commercial property and casualty 
insurance in lines subject to TRIP are required to respond to this data 
call no later than May 15, 2018, subject to certain exceptions 
identified in this notice.
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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.

DATES: Participating insurers must register and submit data no later 
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than May 15, 2018.

ADDRESSES:  Participating insurers will register through a website that 
has been established for this data call. After registration, insurers 
will receive data collection forms through a secure file transfer 
portal, and they will submit the requested data through the same secure 
portal. Participating insurers can register for the 2018 TRIP Data Call 
at https://tripsection111data.com/. Additional information about the 
data call, including sample data collection forms and instructions, can 
be found on

[[Page 14719]]

the TRIP website at https://www.treasury.gov/resource-center/fin-mkts/Pages/TRIP_data.aspx.

FOR FURTHER INFORMATION CONTACT: Richard Ifft, Senior Insurance 
Regulatory Policy Analyst, Federal Insurance Office, Room 1410, 
Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 
20220, at (202) 622-2922 (this is not a toll-free number), or Lindsey 
Baldwin, Senior Policy Analyst, Federal Insurance Office, Room 1410, 
Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 
20220, at (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

    TRIA created the 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.\4\ The 
Federal Insurance Office (FIO) is authorized to assist the Secretary in 
the administration of the Program,\5\ including conducting the annual 
data call.
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    \2\ Public Law 114-1, 129 Stat. 3.
    \3\ TRIA sec. 104(h).
    \4\ Treasury regulations also address the annual data collection 
requirement. See 31 CFR 50.51, 50.54.
    \5\ 31 U.S.C. 313(c)(1)(D).
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    On November 28, 2017, Treasury published the data collection forms 
that it proposed to use for the 2018 TRIP Data Call, and invited the 
public to provide comments concerning these forms.\6\ Treasury received 
twelve comments.\7\ In response, and as discussed further below, 
Treasury has made a number of modifications to the forms and 
instructions. The Office of Management and Budget (OMB) has approved 
the use of these forms under Control Number 1505-0257.
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    \6\ 82 FR 56328 (Nov. 28, 2017).
    \7\ Treasury received comments from Marsh Captive Solutions 
(Marsh), Lloyd's of London (Lloyd's), Aon Insurance Managers (Aon), 
Artex Risk Solutions (Artex), and a joint letter from the American 
Insurance Association, the Property Casualty Insurers Association of 
American, and the National Association of Mutual Insurance Companies 
(AIA/PCI/NAMIC). In addition, Treasury received one duplicate 
comment, and six comments unrelated to TRIP or the 2018 TRIP Data 
Call. The comments are available at https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&dct=PS&D=TREAS-TRIP-2017-0015. References to these comments are incorporated below 
where appropriate.
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II. Changes to 2018 Data Call

    For purposes of the 2018 Data Call, and for the first time, FIO, 
state insurance regulators, and the National Association of Insurance 
Commissioners (NAIC) coordinated and developed a consolidated data call 
mechanism designed to meet the regulatory objectives of both Treasury 
and state insurance regulators. The approach relies upon joint 
reporting templates derived from prior reporting templates used by 
Treasury, which were subject to minor changes based upon experience 
gained from the 2017 data call, coordination with state insurance 
regulators and the NAIC, and public comments. Commenters were 
appreciative of the consolidated data call for 2018, which will allow 
insurers to satisfy most of their terrorism risk insurance reporting 
obligations for Treasury and state regulators through submission of the 
same data to each entity.

A. Reporting Process

    Insurers subject to the consolidated data call will report on a 
group basis, unless they are not part of a group, in which case they 
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. Questions about the submission of data to state regulators or 
the property supplement should be directed to the appropriate state 
insurance regulator or the NAIC.
    For the 2018 data call, Treasury will again work with the National 
Council on Compensation Insurance (NCCI) and the California Workers' 
Compensation Insurance Rating Bureau (California WCIRB) to provide 
(either directly or through other workers' compensation rating 
bureaus), on behalf of participating insurers, the workers' 
compensation insurance elements of the data call relating to premium 
and payroll information. The data aggregator used by Treasury will 
provide such insurers with reporting templates that do not require them 
to report this workers' compensation data. Reporting insurers that only 
write workers' compensation policies are still required to register for 
the data call, provide general company information, and provide data 
related to private reinsurance. The remaining data received from NCCI 
and/or the California WCIRB will be merged with the information 
provided by the insurers.

B. Reporting Templates

    Commenters primarily provided specific suggestions concerning 
individual data elements and/or the instructions concerning those 
elements. In response to these comments, Treasury has revised the data 
collection forms and/or instructions with respect to the following: The 
treatment of policyholder deductibles; \8\ the aggregation of premium 
and exposure data, and treatment of risks that cannot be otherwise 
allocated to a specific geographic area (e.g., aviation, ocean marine, 
etc.); \9\ the treatment of deductible reimbursement policies issued by 
captive insurers; \10\ the reporting of insurance information 
concerning cyber risks and standalone terrorism risks; \11\ the 
standardization of language across worksheets; \12\ and several other 
minor technical changes.
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    \8\ See AIA/NAMIC/PCI Comments at 4-5.
    \9\ See AIA/NAMIC/PCI Comments at 5; Marsh Comments at 1-2.
    \10\ See Artex Comments at 1; Aon Comments at 1; Marsh Comments 
at 2.
    \11\ See Marsh Comments at 2; Lloyd's Comments at 2-3.
    \12\ See Lloyd's Comments at 2-3.
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    One commenter urged FIO and state regulators to adopt a single 
reporting template for alien surplus lines insurers.\13\ For the 2018 
data call, Treasury and the state regulators will accept the same data 
collection template for alien surplus lines insurers. However, for 
purposes of the Treasury data call, alien surplus lines insurers that 
are part of a group are required to submit their data as part of the 
group.

[[Page 14720]]

By contrast, for purposes of the state data call, alien surplus lines 
insurers will be required to submit this information on an individual 
company basis.
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    \13\ See Lloyd's Comments at 1. 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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    In summary, Treasury is making five changes that will affect all 
categories of insurers. 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 also include a new modeled loss 
question.\14\ Third, the exposures worksheet will also request 
information concerning policyholder deductibles and retention amounts, 
in addition to the insurer exposure under policies subject to the 
Program. Fourth, the reporting templates no longer seek information on 
terrorism risk insurance premiums for years prior to the reporting 
period, because Treasury has already collected this information.\15\ 
Fifth, insurers are required to separately report on the Premium 
(Jurisdiction) and Exposure (Jurisdiction) spreadsheets any premium and 
exposure information that cannot be otherwise allocated to a specific 
jurisdiction.
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    \14\ Small insurers will complete a separate reinsurance 
worksheet that does not contain the modeled loss question.
    \15\ 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 template changes that are specific to 
individual insurer categories. For the 2018 data call, an insurer will 
qualify as a small insurer if it had both 2016 policyholder surplus and 
2016 direct earned premium in TRIP-eligible lines of insurance of less 
than $700 million.\16\ Of this group, small insurers with TRIP-eligible 
direct earned premium of less than $10 million in 2017 will be exempt 
from the 2018 consolidated TRIP data call.\17\ Neither captive insurers 
nor alien surplus lines insurers are eligible for this reporting 
exemption. In addition to the changes applicable to all insurers, small 
insurers will be required to report additional information on 
standalone terrorism policies. Small insurers will also be required to 
report on the reinsurance worksheet their largest estimated probable 
maximum loss at a single location and the ZIP code of that location. 
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 property coverages, small insurers will also provide 
additional reporting on an individual company basis in the property 
supplement submitted solely to state insurance regulators.
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    \16\ 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.
    \17\ Individual insurers with less than $10 million in TRIP-
eligible lines direct earned premium that are part of a larger group 
must still report as part of the group as a whole, if the group's 
TRIP-eligible lines direct earned premium is over $10 million.
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    Non-small insurers will no longer be required to complete a 
separate worksheet on package/multiline policies. The non-small insurer 
template will 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 TRIP-eligible lines of 
insurance equal to or greater than $700 million, and that are not 
subject to reporting on the captive insurer or alien surplus lines 
insurer reporting templates. Otherwise, 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, non-small insurers will also provide additional reporting on 
an individual company basis in a property supplement submitted solely 
to state insurance regulators.\18\
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    \18\ For more information about the property supplement, visit 
the NAIC's Terrorism Risk Insurance Data Call web page, http://www.naic.org/industry_terrorism_risk_data_call.htm.
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    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. Captive 
insurers that wrote policies in TRIP-eligible lines of insurance during 
the reporting period are required to register and submit data to 
Treasury, unless they did not provide their insureds with any terrorism 
risk insurance subject to the Program.
    The reporting template for alien surplus lines insurers does not 
contain additional changes specific to those insurers. 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 to Treasury 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. As noted above, insurers defined as alien surplus lines 
insurers for the 2018 data call will continue to be required to submit 
data to state insurance regulators on an individual basis, even if part 
of a larger group.\19\
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    \19\ For more information about the NAIC's Terrorism Risk 
Insurance Data Call web page http://www.naic.org/industry_terrorism_risk_data_call.htm.
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C. Modeled Loss Scenario

    One commenter appreciated the inclusion of a new modeled loss 
scenario, and encouraged FIO to consider a scenario in the future that 
involves locations that are not located in urban areas, but nonetheless 
benefit from TRIA (e.g., rural infrastructure hubs and transportation 
networks).\20\ FIO will continue to vary the modeled scenario on an 
annual basis, and FIO will coordinate with stakeholders to obtain 
feedback on potential scenarios before they are used in any future data 
calls.
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    \20\ See AIA/NAMIC/PCI Comments at 6.
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D. Supplemental Reference Documents

    Several commenters also requested that Treasury issue certain 
supplemental materials to assist in the data submission process, such 
as the inclusion of a comprehensive list of ZIP codes that define the 
areas identified on the Geographic Exposures (Nationwide) worksheet 
\21\ and hypothetical policy scenarios to assist insurers in 
understanding how to enter data in certain situations where the 
relevant policy spans multiple calendar years. In response to these 
comments, Treasury will post reference documents on its data collection 
website (https://www.treasury.gov/resource-center/fin-mkts/Pages/TRIP_data.aspx) providing a complete ZIP code listing for areas subject 
to reporting on the Geographic Exposures (Nationwide) worksheet, as 
well as several hypothetical policy reporting scenarios.
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    \21\ See AIA/NAMIC/PCI Comments at 4; Marsh Comments at 2.

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[[Page 14721]]

    One commenter asked Treasury to consider eliminating from the data 
call the lines of coverage that are less likely to be triggered in the 
event of an act of terrorism, noting that Treasury is not obligated to 
collect data on all TRIP-eligible lines.\22\ Treasury is not making 
this change. Treasury notes that the types of insurance subject to the 
Program are set forth in the statute,\23\ and in order to obtain a 
comprehensive understanding of the Program's effectiveness, it is 
necessary to collect data on all TRIP-eligible lines to achieve a 
complete view of Program participation. In addition, the information 
concerning these lines would also be relevant for assessing any risk-
spreading policyholder surcharges levied by Treasury,\24\ and in 
connection with the calculation of the insurance marketplace aggregate 
retention for calendar year 2020.\25\
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    \22\ See AIA/NAMIC/PCI Comments at 5-6.
    \23\ See TRIA sec. 102(6),(11); TRIA sec. (103)(a)(3).
    \24\ See TRIA sec. 103(e)(8)(A)(i).
    \25\ See 31 CFR 50.4(m).
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E. Training Webinar

    One commenter requested that Treasury hold training for the 2018 
data call within two (2) weeks following the issuance of the templates, 
and recommended holding four (4) separate training sessions 
corresponding to the four (4) reporting templates that will be used by 
insurers (Alien Surplus Lines Insurers, Captive Insurers, Insurer (Non-
Small) Groups or Companies, and Small Insurers).\26\ In response to 
this comment, Treasury will hold four webinars on April 10 and April 
11, 2018 to assist reporting insurers in responding to the proposed 
collection, with each webinar focusing on a specific reporting 
template. Specific times and details concerning participation in the 
webinar will be made available on the TRIP data collection website, and 
recordings of each webinar will be made available on the website 
following each training session.
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    \26\ See Marsh Comments at 1.
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III. 2018 Data Call

    For the 2018 TRIP Data Call, which covers the reporting period of 
January 1, 2017 to December 31, 2017, Treasury will continue to use 
four different data collection templates.\27\ Insurers will fill out 
the template for ``Insurer (Non-Small) Groups or Companies,'' unless 
the insurer meets the definition of a small insurer, captive insurer, 
or alien surplus insurer, as set forth in 31 CFR 50.4. Such small 
insurers, captive insurers, and alien surplus lines insurers are 
required to complete an alternate template.
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    \27\ See 31 CFR 50.51(c).
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    Similar to last year, Treasury, through an insurance statistical 
aggregator, will accept group or insurer registration forms through 
https://tripsection111data.com/. Upon registration, the aggregator will 
transmit individualized data collection forms (in Excel format) to the 
reporting group or insurer via a secure file transfer portal. The 
reporting group or insurer may transmit a complete data submission 
using either the provided Excel forms, or (for the first time this 
year) in a .csv file.\28\
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    \28\ Specifications for submission of data using a .csv file 
will be provided to the insurer by the aggregator.
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    Copies of the instructions and data collection forms are available 
on Treasury's website in read-only format. Reporting insurers will 
obtain the fillable reporting forms directly from the data aggregator 
after registering for the data collection process.
    Reporting insurers are required to register and submit complete 
data to Treasury no later than May 15, 2018. Because of the timing and 
content of Treasury's 2018 report to Congress, no extensions will be 
granted. Reporting insurers can ask the data aggregator questions about 
registration, form completion, and submission through 
[email protected]. Treasury, as identified above, may also be 
contacted directly with questions. Questions regarding submission of 
data to state insurance regulators or the property supplement should be 
directed to the appropriate state insurance regulator or the NAIC.
    All data submitted to the aggregator 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: March 30, 2018.
Steven E. Seitz,
Deputy Director, Federal Insurance Office.
[FR Doc. 2018-06996 Filed 4-4-18; 8:45 am]
 BILLING CODE 4810-35-P