[Federal Register Volume 85, Number 81 (Monday, April 27, 2020)]
[Notices]
[Pages 23435-23436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08817]
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DEPARTMENT OF THE TREASURY
2020 Report on the Effectiveness of the Terrorism Risk Insurance
Program
AGENCY: Departmental Offices, U.S. Department of the Treasury.
ACTION: Request for comment.
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SUMMARY: The Terrorism Risk Insurance Act of 2002, as amended (TRIA),
established the Terrorism Risk Insurance Program (TRIP or Program).
TRIA requires the Secretary of the Treasury (Secretary) to submit a
report to Congress by June 30, 2020 concerning the overall
effectiveness of TRIP and other related matters. To assist the
Secretary in formulating the report, the Federal Insurance Office (FIO)
within the Department of the Treasury (Treasury) is seeking comments
from the industry and other stakeholders on the statutory factors that
the report must analyze, as well as any other feedback about the
effectiveness of TRIP.
DATES: Submit comments on or before June 11, 2020.
ADDRESSES: Submit comments electronically through the Federal
eRulemaking Portal at http://www.regulations.gov, in accordance with
the instructions on that site, 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 2020
report on the effectiveness of the Program should be captioned with
``2020 TRIP Effectiveness Report.'' In general, Treasury will post all
comments to www.regulations.gov without change, including any business
or personal information provided such as names, addresses, email
addresses, or telephone numbers. All comments, including attachments
and other supporting materials, are part of the public record and
subject to public disclosure. You should submit only information that
you wish to make available publicly. Where appropriate, a comment
should include a short Executive Summary (no more than five single-
spaced pages).
Additional Instructions. Responses should also include: (1) The
data or rationale, including examples, supporting any opinions or
conclusions; and (2) any specific legislative, administrative, or
regulatory proposals for carrying out recommended approaches or
options.
FOR FURTHER INFORMATION CONTACT: Richard Ifft, Senior Insurance
Regulatory Policy Analyst, Federal Insurance Office, (202) 622-2922, or
Lindsey Baldwin, Senior Insurance Regulatory Policy Analyst, Federal
Insurance Office, (202) 622-3220. 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 \1\ requires participating insurers to make insurance
available for losses resulting from acts of terrorism, and provides a
federal government backstop for the insurers' resulting financial
exposure. TRIA established TRIP within Treasury, and TRIP is
administered by the Secretary with the assistance of FIO. TRIA Section
104(h)(2) requires the Secretary to prepare and submit a report to the
Committee on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate on,
among other things, the impact and effectiveness of TRIP (the
Effectiveness Report). TRIA was reauthorized in December 2019 with an
additional requirement that Treasury analyze in the Effectiveness
Report the availability and affordability of terrorism risk insurance,
including specifically for houses of worship.\2\ The Effectiveness
Report that is to be submitted by June 30, 2020 will also include an
analysis of information that is being collected by Treasury through the
2020 TRIP Data Call (including information relating specifically to
houses of worship),\3\ as well as data that Treasury collected in prior
TRIP Data Calls.\4\ Treasury structures its data calls to obtain
information appropriate to analyze the effectiveness of TRIP and the
competitiveness of small insurers in the terrorism risk insurance
marketplace,\5\ as well as to assist Treasury more generally in the
administration of TRIP.
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\1\ Public Law 107-297, 116 Stat. 2322 (2002), as amended. The
provisions of TRIA appear in a note of the United States Code (15
U.S.C. 6701 note), and, therefore, references to the provisions of
TRIA are identified by the sections of the law [e.g., ``TRIA Sec.
102(1) (definition of an ``act of terrorism'')''].
\2\ Public Law 116-94, 133 Stat. 2534.
\3\ 2020 Terrorism Risk Insurance Program Data Call, 85 FR 15036
(March 16, 2020).
\4\ The requirements for TRIP Data Calls are set forth in TRIA
Sec. 104(h)(1) and in Treasury regulations. See 31 CFR Subpart F.
\5\ TRIA Sec. 108(h) requires the Secretary to submit a report
to Congress every other year studying small insurers participating
in the Program, and identifying any competitive challenges small
insurers face in the terrorism risk insurance marketplace.
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II. Solicitation for Comments
Treasury seeks comments on each of the following factors, which
Treasury is required under TRIA Section 104(h)(2) to consider in the
Effectiveness Report:
1. The overall effectiveness of TRIP;
2. The availability and affordability of terrorism risk insurance,
including specifically for places of worship;
3. Any changes or trends you have observed relating to the data
Treasury collects in its annual TRIP Data Calls;
4. Whether any aspects of TRIP have the effect of discouraging or
impeding insurers from providing commercial property and casualty
insurance coverage or coverage for acts of terrorism; and
5. Any impact of TRIP on workers' compensation insurers in
particular.
By collecting information and views on the factors listed above,
Treasury will enhance the accuracy and value of the Effectiveness
Report to Congress. This request for comment will provide stakeholders
the opportunity to provide qualitative feedback and analysis that may
not be otherwise observable through the results of the TRIP Data Calls.
Comments from insurers providing data, other stakeholders, and the
public will assist the Secretary in the formulation of the
Effectiveness Report and more generally in the administration of TRIP.
In addition to seeking comments on the above factors outlined in
Section 104(h)(2) of TRIA, Treasury also seeks comments on the
following topics:
1. Whether any lines of insurance or coverages within certain lines
of insurance currently subject to the
[[Page 23436]]
Program do not require the support of TRIP;
2. The market for standalone terrorism risk insurance that is
written outside of TRIP, including the reasons such coverage is offered
and obtained, and whether the existence of such insurance provides any
insights into the effectiveness of the Program;
3. The availability and affordability of private reinsurance, or
capital markets support, for terrorism risk insurance exposures (both
those exposures currently subject to TRIP as well as those otherwise
held by insurers participating in TRIP);
4. The extent to which reinsurance for terrorism risk is being
obtained as part of overall catastrophe reinsurance programs, the
reasons for obtaining reinsurance for terrorism risk in this manner,
and how--if at all--this has affected market capacity for terrorism
risk reinsurance generally;
5. Any factors that impede private reinsurance or capital markets
support for terrorism risk insurance;
6. The availability of terrorism risk insurance coverage for losses
arising from nuclear, biological, chemical, or radiological (NBCR)
exposures, and the availability of private reinsurance or capital
markets support for such terrorism risk insurance;
7. Terrorism risk insurance issues presented by cyber-related
losses, and the impact of TRIP in connection with such exposures,
including your views as to the nature of the cyber-related terrorism
losses that are included within TRIP; \6\
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\6\ Treasury has previously addressed the application of TRIP to
policies covering cyber-related losses. 81 FR 95312 (December 27,
2016).
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8. Any potential changes that would encourage the take up of
insurance for cyber-related losses arising from acts of terrorism as
defined under TRIA, including but not limited to the modification of
the lines of insurance covered by TRIP, revisions to the current
sharing mechanisms for cyber-related losses, and further changes to the
certification process as it would apply to a cyber-related terrorism
loss;
9. Private reinsurance or capital markets support for cyber-related
losses arising from acts of terrorism as defined under TRIA; and
10. Any other issues relating to TRIP, terrorism risk insurance, or
reinsurance that may be relevant to FIO's assessment of the
effectiveness of TRIP in the Effectiveness Report.
Dated: April 21, 2020.
Steven E. Seitz,
Director, Federal Insurance Office.
[FR Doc. 2020-08817 Filed 4-24-20; 8:45 am]
BILLING CODE 4810-25-P