HR 4299
12-12-07, Bill Passed House 303-116
Referred to Senate
Committee on Banking, Housing & Urban Affairs
110th CONGRESS
1st Session
H. R. 4299
IN THE SENATE OF THE UNITED STATES
December 13, 2007
Read twice and referred to the Committee on Banking, Housing, and Urban
Affairs
AN ACT
To extend the Terrorism Insurance Program of the Department of
the Treasury, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Terrorism Risk Insurance
Program Reauthorization Act of 2007'.
(b) Table of Contents- The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definition of act of terrorism.
Sec. 3. Reauthorization of the program.
Sec. 4. Annual liability cap.
Sec. 5. Enhanced reports to Congress.
Sec. 6. Coverage of group life insurance.
Sec. 7. Large event reset.
Sec. 8. Availability of life insurance without regard to lawful foreign
travel.
SEC. 2. DEFINITION OF ACT OF TERRORISM.
Section 102(1)(A)(iv) of the Terrorism Risk Insurance Act of 2002 (15
U.S.C. 6701 note) is amended by striking `acting on behalf of any foreign
person or foreign interest'.
SEC. 3. REAUTHORIZATION OF THE PROGRAM.
(a) Termination Date- Section 108(a) of the Terrorism Risk Insurance Act
of 2002 (15 U.S.C. 6701 note) is amended by striking `2007' and inserting
`2014'.
(b) Additional Program Years- Section 102(11) of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) is amended by adding at the end the
following:
`(G) ADDITIONAL PROGRAM YEARS- Except when used as provided in subparagraphs
(B) through (F), the term `Program Year' means, as the context requires,
any of Program Year 1, Program Year 2, Program Year 3, Program Year
4, Program Year 5, or any of calendar years 2008 through 2014.'.
(c) Conforming Amendments- The Terrorism Risk Insurance Act of 2002 (15
U.S.C. 6701 note) is amended--
(1) in section 102(7)(F)--
(A) by inserting `and each Program Year thereafter' before `, the
value'; and
(B) by striking `preceding Program Year 5' and inserting `preceding
that Program Year';
(2) in section 103(e)(1)(A), by inserting `and each Program Year thereafter'
after `Year 5';
(3) in section 103(e)(1)(B)(ii), by inserting before the period at the
end `and any Program Year thereafter';
(4) in section 103(e)(2)(A), by striking `of Program Years 2 through
5' and inserting `Program Year thereafter';
(5) in section 103(e)(3), by striking `of Program Years 2 through 5,'
and inserting `other Program Year'; and
(6) in section 103(e)(6)(E), by inserting `and any Program Year thereafter'
after `Year 5'.
SEC. 4. ANNUAL LIABILITY CAP.
(a) In General- Section 103(e)(2) of the Terrorism Risk Insurance Act
of 2002 (15 U.S.C. 6701 note) is amended--
(1) in subparagraph (A)--
(A) by striking `(until such time as the Congress may act otherwise
with respect to such losses)'; and
(B) in clause (ii), by striking `that amount' and inserting `the amount
of such losses'; and
(2) in subparagraph (B), by inserting before the period at the end `,
except that, notwithstanding paragraph (1) or any other provision of
Federal or State law, no insurer may be required to make any payment
for insured losses in excess of its deductible under section 102(7)
combined with its share of insured losses under paragraph (1)(A) of
this subsection'.
(b) Notice to Congress- Section 103(e)(3) of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) by adding at the end the following: `The Secretary shall provide
an initial notice to Congress not later than 15 days after the date
of an act of terrorism, stating whether the Secretary estimates that
aggregate insured losses will exceed $100,000,000,000.'; and
(2) by striking `and the Congress shall' and all that follows through
the end of the paragraph and inserting a period.
(c) Regulations for Pro Rata Payments; Report to Congress- Section 103(e)(2)(B)
of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) by striking `For purposes' and inserting the following:
`(i) IN GENERAL- For purposes'; and
(2) by adding at the end the following:
`(ii) REGULATIONS- Not later than 240 days after the date of enactment
of the Terrorism Risk Insurance Program Reauthorization Act of 2007,
the Secretary shall issue final regulations for determining the
pro rata share of insured losses under the Program when insured
losses exceed $100,000,000,000, in accordance with clause (i).
`(iii) REPORT TO CONGRESS- Not later than 120 days after the date
of enactment of the Terrorism Risk Insurance Program Reauthorization
Act of 2007, the Secretary shall provide 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 describing
the process to be used by the Secretary for determining the allocation
of pro rata payments for insured losses under the Program when such
losses exceed $100,000,000,000.'.
(d) Disclosure- Section 103(b) of the Terrorism Risk Insurance Act of
2002 (15 U.S.C. 6701 note) is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5),
respectively; and
(2) by inserting after paragraph (2) the following:
`(3) in the case of any policy that is issued after the date of enactment
of the Terrorism Risk Insurance Program Reauthorization Act of 2007,
the insurer provides clear and conspicuous disclosure to the policyholder
of the existence of the $100,000,000,000 cap under subsection (e)(2),
at the time of offer, purchase, and renewal of the policy;'.
(e) Surcharges- Section 103(e) of the Terrorism Risk Insurance Act of
2002 (15 U.S.C. 6701 note) is amended--
(A) in subparagraph (C), by inserting `133 percent of' before `any
mandatory recoupment'; and
(B) by adding at the end the following:
`(E) TIMING OF MANDATORY RECOUPMENT-
`(i) IN GENERAL- If the Secretary is required to collect terrorism
loss risk-spreading premiums under subparagraph (C)--
`(I) for any act of terrorism that occurs on or before December
31, 2010, the Secretary shall collect all required premiums by
September 30, 2012;
`(II) for any act of terrorism that occurs between January 1 and
December 31, 2011, the Secretary shall collect 35 percent of any
required premiums by September 30, 2012, and the remainder by
September 30, 2017; and
`(III) for any act of terrorism that occurs on or after January
1, 2012, the Secretary shall collect all required premiums by
September 30, 2017.
`(ii) REGULATIONS REQUIRED- Not later than 180 days after the date
of enactment of this subparagraph, the Secretary shall issue regulations
describing the procedures to be used for collecting the required
premiums in the time periods referred to in clause (i).
`(F) NOTICE OF ESTIMATED LOSSES- Not later than 90 days after the
date of an act of terrorism, the Secretary shall publish an estimate
of aggregate insured losses, which shall be used as the basis for
determining whether mandatory recoupment will be required under this
paragraph. Such estimate shall be updated as appropriate, and at least
annually.'; and
(A) in subparagraph (C)--
(i) by striking `(including any additional amount included in such
premium' and inserting `collected'; and
(ii) by striking `(D))' and inserting `(D)'; and
(B) in subparagraph (D)(ii), by inserting before the period at the
end `, in accordance with the timing requirements of paragraph (7)(E)'.
SEC. 5. ENHANCED REPORTS TO CONGRESS.
(a) Study and Report on Insurance for Nuclear, Biological, Chemical, and
Radiological Terrorist Events- Section 108 of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) is amended by adding at the end the
following:
`(f) Insurance for Nuclear, Biological, Chemical, and Radiological Terrorist
Events-
`(1) STUDY- The Comptroller General of the United States shall examine--
`(A) the availability and affordability of insurance coverage for
losses caused by terrorist attacks involving nuclear, biological,
chemical, or radiological materials;
`(B) the outlook for such coverage in the future; and
`(C) the capacity of private insurers and State workers compensation
funds to manage risk associated with nuclear, biological, chemical,
and radiological terrorist events.
`(2) REPORT- Not later than 1 year after the date of enactment of the
Terrorism Risk Insurance Program Reauthorization Act of 2007, the Comptroller
General shall submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives a report containing a detailed statement of
the findings under paragraph (1), and recommendations for any legislative,
regulatory, administrative, or other actions at the Federal, State,
or local levels that the Comptroller General considers appropriate to
expand the availability and affordability of insurance for nuclear,
biological, chemical, or radiological terrorist events.'.
(b) Study and Report on Availability and Affordability of Terrorism Insurance
in Specific Markets- Section 108 of the Terrorism Risk Insurance Act of
2002 (15 U.S.C. 6701 note) is amended by adding at the end the following:
`(g) Availability and Affordability of Terrorism Insurance in Specific
Markets-
`(1) STUDY- The Comptroller General of the United States shall conduct
a study to determine whether there are specific markets in the United
States where there are unique capacity constraints on the amount of
terrorism risk insurance available.
`(2) ELEMENTS OF STUDY- The study required by paragraph (1) shall contain--
`(A) an analysis of both insurance and reinsurance capacity in specific
markets, including pricing and coverage limits in existing policies;
`(B) an assessment of the factors contributing to any capacity constraints
that are identified; and
`(C) recommendations for addressing those capacity constraints.
`(3) REPORT- Not later than 180 days after the date of enactment of
the Terrorism Risk Insurance Program Reauthorization Act of 2007, the
Comptroller General shall submit a report on the study required by paragraph
(1) to the Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of Representatives.'.
(c) Ongoing Reports- Section 108(e) of the Terrorism Risk Insurance Act
of 2002 (15 U.S.C. 6701 note) is amended--
(A) by inserting `ongoing' before `analysis'; and
(B) by striking `, including' and all that follows through the end
of the paragraph, and inserting a period; and
(A) by inserting `and thereafter in 2010 and 2013,' after `2006,';
and
(B) by striking `subsection (a)' and inserting `paragraph (1)'.
SEC. 6. COVERAGE OF GROUP LIFE INSURANCE.
(a) Findings and Purpose- Section 101 of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) is amended--
(A) in paragraph (5), by striking `and' at the end;
(B) by redesignating paragraph (6) as paragraph (8); and
(C) by inserting after paragraph (5) the following new paragraphs:
`(6) group life insurance companies are important financial institutions
whose products make life insurance coverage affordable for millions
of Americans and often serve as their only life insurance benefit;
`(7) the group life insurance industry, in the event of a severe act
of terrorism, is vulnerable to insolvency because high concentrations
of covered employees work in the same locations, because primary group
life insurers do not exclude terrorism risks while most catastrophic
reinsurance does exclude such risks, and because a large-scale loss
of life would fall outside of actuarial expectations of death; and';
and
(2) in subsection (b)(1), by inserting `and group life insurance' after
`property and casualty insurance'.
(b) Definitions- Section 102 of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note), as amended by the preceding provisions of this
Act, is further amended--
(1) in paragraph (1)(B)(ii), by inserting `and group life insurance'
before `losses';
(2) in paragraph (5), in the matter preceding subparagraph (A)--
(A) by inserting `, or group life insurance to the extent of the amount
at risk,' after `property and casualty insurance';
(B) by inserting a comma after `insurer'; and
(C) by adding after and below subparagraph (B) the following:
`Such term shall not include any losses of an insurer resulting from
coverage of any single certificate holder under any group life insurance
coverages of the insurer to the extent such losses are not compensated
under the Program by reason of section 103(e)(1)(D).';
(A) in subparagraph (A)(i), by inserting `, or group life insurance,'
after `excess insurance'; and
(B) in subparagraph (B), by inserting `or, in the case of group life
insurance, that receives direct premiums,' after `insurance coverage,';
(A) in subparagraph (F)--
(i) by striking the first comma and inserting `(i) with respect
to property and casualty insurance,'; and
(ii) by inserting before the semicolon the following: `(ii) with
respect to group life insurance, the value of an insurer's amount
at risk for a covered line of insurance over the calendar year immediately
preceding such Program Year, multiplied by 0.0351 percent';
(B) in subparagraph (G)--
(i) by inserting `with respect to property and casualty insurance,
and such portion of the amounts at risk with respect to group life
insurance,' after `such portion of the direct earned premiums';
and
(ii) by inserting `and amounts at risk' after `such direct earned
premiums';
(5) by redesignating paragraph (16) as paragraph (18); and
(6) by inserting after paragraph (15) the following new paragraphs:
`(16) GROUP LIFE INSURANCE- The term `group life insurance' means an
insurance contract that provides life insurance coverage, including
term life insurance coverage, universal life insurance coverage, variable
universal life insurance coverage, and accidental death coverage, or
a combination thereof, for a number of individuals under a single contract,
on the basis of a group selection of risks, but does not include `Corporate
Owned Life Insurance' or `Business Owned Life Insurance,' each as defined
under the Internal Revenue Code of 1986, or any similar product, or
group life reinsurance or retrocessional reinsurance.
`(17) AMOUNT AT RISK- The term `amount at risk' means face amount less
statutory policy reserves for group life insurance issued by any insurer
for insurance against losses occurring at the locations described in
subparagraph (A) of paragraph (5).'.
(c) Mandatory Availability- Section 103(c) of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) is amended by striking `During each
Program Year' and all that follows through `property and casualty insurance'
in paragraph (2) and inserting the following:
`(1) AVAILABILITY OF COVERAGE FOR INSURED LOSSES- During each Program
Year, each entity that meets the definition of an insurer under section
102 shall make available, in all of its insurance policies for property
and casualty insurance and in all of its insurance policies for group
life insurance,'.
(d) Federal Share of Compensation- Section 103(e)(1) of the Terrorism
Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended by adding
at the end the following new subparagraph:
`(D) LIMITATION ON COMPENSATION FOR GROUP LIFE INSURANCE- Notwithstanding
any other provision of this Act, the Federal share of compensation
under the Program paid by the Secretary for insured losses of an insurer
resulting from coverage of any single certificate holder under any
group life insurance coverages of the insurer may not during any Program
Year exceed $1,000,000.'.
(e) Separate Retention Pool- Section 103(e)(6)(E) of the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended by striking clauses
(i) and (ii) and inserting the following new clauses:
`(i) for property and casualty insurance, the lesser of--
`(I) $27,500,000,000; and
`(II) the aggregate amount, for all such insurance, of insured
losses during such Program Year; and
`(ii) for group life insurance, the lesser of--
`(II) the aggregate amount, for all such insurance, of insured
losses during such Program Year.'.
(f) Separate Recoupment- Section 103(e)(7) of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note), as amended by the preceding provisions
of this Act, is further amended--
(1) in subparagraph (A)--
(A) in clause (i), by inserting `applicable' before `insurance'; and
(B) in clause (ii), by striking `all insurers' and inserting `all
applicable insurers (pursuant to subparagraph (G))';
(2) in subparagraph (B)--
(A) in the heading, by inserting `APPLICABLE' before `INSURANCE';
and
(B) by inserting `applicable' before `insurance'; and
(3) by adding at the end the following new subparagraph:
`(G) SEPARATE RECOUPMENT- `The Secretary shall provide that--
`(i) any recoupment under this paragraph of amounts paid for Federal
financial assistance for insured losses for property and casualty
insurance shall be applied to property and casualty insurance policies;
and
`(ii) any recoupment under this paragraph of amounts paid for Federal
financial assistance for insured losses for group life insurance
shall be applied to group life insurance policies.'.
(g) Policy Surcharge for Terrorism Loss Risk-Spreading Premiums- Section
103(e)(8) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by striking `Any' and inserting
`Subject to paragraph (7)(G), any';
(B) in clause (i), by inserting `and group life insurance policies'
after `policies'; and
(C) by striking clause (iii) and inserting the following new clause:
`(I) a percentage of the premium amount charged for property and
casualty insurance coverage under the policy; and
`(II) a percentage of the amount at risk for group life insurance
coverage under the policy.'; and
(2) in subparagraph (C)--
(A) by inserting `with respect to property and casualty insurance,'
after `annual basis,'; and
(B) by inserting before the period at the end the following: `and,
with respect to group life insurance, the amount equal to 0.0053 percent
of the amount at risk for covered lines under the policy'.
SEC. 7. LARGE EVENT RESET.
The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
(A) in subparagraph (F), by striking `and' at the end;
(B) in subparagraph (G), by striking the period at the end and inserting
`; and'; and
(C) by adding at the end the following new subparagraph:
`(H) notwithstanding subparagraph (F)(i), if aggregate industry insured
losses resulting from a certified act of terrorism exceed $1,000,000,000,
for any insurer that sustains insured losses resulting from such act
of terrorism, the value of such insurer's direct earned premiums over
the calendar year immediately preceding the Program Year, multiplied
by a percentage, which--
`(i) for the Program Year consisting of calendar year 2008 shall
be 5 percent; and
`(ii) for each Program Year thereafter, shall be 50 basis points
greater than the percentage applicable to the preceding Program
Year, except that if an act of terrorism occurs during any such
Program Year that results in aggregate industry insured losses exceeding
$1,000,000,000, the percentage for the succeeding Program Year shall
be 5 percent and the increase under this clause shall apply to Program
Years thereafter;
except that for purposes of determining under this subparagraph whether
aggregate industry insured losses exceed $1,000,000,000, the Secretary
may combine insured losses resulting from two or more certified acts
of terrorism occurring during such Program Year in the same geographic
area (with such area determined by the Secretary), in which case such
insurer shall be permitted to combine insured losses resulting from
such acts of terrorism for purposes of satisfying its insurer deductible
under this subparagraph; and except that the insurer deductible under
this subparagraph shall apply only with respect to compensation of
insured losses resulting from such certified act, or combined certified
acts, and that for purposes of compensation of any other insured losses
occurring in the same Program Year, the insurer deductible determined
under subparagraph (F)(i) shall apply.'; and
(2) in section 103(e)(1)(B)--
(A) in clause (ii), by striking the period at the end and inserting
a semicolon; and
(B) by adding after and below clause (ii) the following:
`except that if a certified act of terrorism occurs for which resulting
aggregate industry insured losses exceed $1,000,000,000, the applicable
amount for any subsequent certified act of terrorism shall be the
amount specified in section 102(1)(B)(ii).'.
SEC. 8. AVAILABILITY OF LIFE INSURANCE WITHOUT REGARD TO LAWFUL FOREIGN
TRAVEL.
Section 103(c) of the Terrorism Risk Insurance Act of 2002 (15 U.S.C.
6701 note), as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new paragraph:
`(2) AVAILABILITY OF LIFE INSURANCE WITHOUT REGARD TO LAWFUL FOREIGN
TRAVEL- During each Program Year, each entity that meets the definition
of an insurer under section 102 and any other entity that issues insurance
contracts that provide life insurance coverage shall make available,
in all of its life insurance policies issued after the date of the enactment
of the Terrorism Risk Insurance Program Reauthorization Act of 2007
under which the insured person is a citizen of the United States or
an alien lawfully admitted for permanent residence in the United States,
coverage that neither considers past, nor precludes future, lawful foreign
travel by the person insured, and shall not decline such coverage based
on past or future, lawful foreign travel by the person insured or charge
a premium for such coverage that is excessive and not based on a good
faith actuarial analysis, except that an insurer may decline or, upon
inception or renewal of a policy, limit the amount of coverage provided
under any life insurance policy based on plans to engage in future lawful
foreign travel to occur within 12 months of such inception or renewal
of the policy but only if, at time of application--
`(A) such declination is based on, or such limitation applies only
with respect to, travel to a foreign destination--
`(i) for which the Director of the Centers for Disease Control and
Prevention of the Department of Health and Human Services has issued
a highest level alert or warning, including a recommendation against
non-essential travel, due to a serious health-related condition;
`(ii) in which there is an ongoing military conflict involving the
armed forces of a sovereign nation other than the foreign destination
to which the insured person is traveling; or
`(iii)(I) that the insurer has specifically designated in the terms
of the life insurance policy at the inception of the policy or at
renewal, as applicable; and
`(II) with respect to which the insurer has made a good-faith determination
that--
`(aa) a serious fraudulent situation exists which is ongoing;
and
`(bb) the credibility of information by which the insurer can
verify the death of the insured person is substantially compromised;
and
`(B) in the case of any limitation of coverage, such limitation is
specifically stated in the terms of the life insurance policy at the
inception of the policy or at renewal, as applicable.'.
SEC. 9. PROGRAM TRIGGER.
Section 103(e)(1)(B)(ii) of the Terrorism Risk Insurance Act of 2002 (15
U.S.C. 6701 note) is amended by striking `$100,000,000' and inserting
`$50,000,000'.
SEC. 10. APPLICABILITY.
The amendments made by this Act shall apply beginning on January 1, 2008.
The provisions of the Terrorism Risk Insurance Act of 2002, as in effect
on the day before the date of the enactment of this Act, shall apply through
the end of December 31, 2007.
Passed the House of Representatives December 12, 2007.
Attest:
LORRAINE C. MILLER,
Clerk.
END
