[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4299 Referred in Senate (RFS)]
1st Session
H. R. 4299
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 12, 2007
Received
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. 9. Program trigger.
Sec. 10. Applicability.
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--
(1) in paragraph (7)--
(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
(2) in paragraph (8)--
(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--
(1) in paragraph (1)--
(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
(2) in paragraph (2)--
(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--
(1) in subsection (a)--
(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).'';
(3) in paragraph (6)--
(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,'';
(4) in paragraph (7)--
(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--
``(I) $5,000,000,000; and
``(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:
``(iii) be based on--
``(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--
(1) in section 102(7)--
(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.