To extend the terrorism insurance program of the Department of the Treasury.

Summary: Terrorism Insurance Backstop Extension Act of 2005 - Amends the Terrorism Risk Insurance Act of 2002 to define: (1) the term "Program Year 4" as the period from January 1, 2006, through December 31, 2006; and (2) the term "Program Year 5" as the period from January 1, 2007, from December 31, 2007 (thereby extending the terrorism risk insurance program from 2005 through 2007).

Sets a deadline for the Secretary of the Treasury to make a final determination regarding: (1) the availability of group life insurance to both insurers and consumers; and (2) whether certain provisions of the Act shall be applied to providers of group life insurance.

Sunsets the Terrorism Risk Insurance Program after December 31, 2007.

Details the treatment of insured losses and the insurer deductible for the Final Program Year (January 1, 2008, through December 31, 2008).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Terrorism Insurance Backstop 
Extension Act of 2005''.

SEC. 2. EXTENSION OF TERRORISM INSURANCE PROGRAM.

    (a) Program Years 4 and 5.--Paragraph (11) of section 102 of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended 
by adding at the end the following new subparagraphs:
                    ``(E) Program year 4.--The term `Program Year 4' 
                means the period beginning on January 1, 2006 and 
                ending on December 31, 2006.
                    ``(F) Program year 5.--The term `Program Year 5' 
                means the period beginning on January 1, 2007 and 
                ending on December 31, 2007.''.
    (b) Insurer Deductible.--Paragraph (7) of section 102 of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
            (1) by redesignating subparagraph (E) as subparagraph (H);
            (2) in subparagraph (D), by striking ``and'' at the end;
            (3) by inserting after subparagraph (D) the following new 
        subparagraphs:
                    ``(E) for Program Year 4, the value of an insurer's 
                direct earned premiums over the calendar year 
                immediately preceding Program Year 4, multiplied by 15 
                percent;
                    ``(F) for Program Year 5, the value of an insurer's 
                direct earned premiums over the calendar year 
                immediately preceding Program Year 4, multiplied by 20 
                percent; and'';
            (4) in subparagraph (H) (as so redesignated by paragraph 
        (1) of this subsection)--
                    (A) by striking ``(D)'' and inserting ``(F)''; and
                    (B) by striking ``or Program Year 3'' and inserting 
                ``Program Year 3, Program Year 4, or Program Year 5''.
    (c) Mandatory Availability.--Subsection (c) of section 103 of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
            (1) by striking all of the matter that precedes 
        subparagraph (A) of paragraph (1) and inserting the following:
    ``(c) Mandatory Availability.--During the Program, each entity that 
meets the definition of an insurer under section 102--'';
            (2) by striking paragraph (2); and
            (3) by redesignating subparagraphs (A) and (B) as 
        paragraphs (1) and (2) and realigning such paragraphs, as so 
        redesignated, so as to be indented 2 ems from the left margin.
    (d) Insured Loss Shared Compensation.--Subsection (e) of section 
103 of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) 
is amended--
            (1) in paragraph (2)(A), by striking ``or Program Year 3'' 
        and inserting ``, Program Year 3, Program Year 4, Program Year 
        5, or the final Program Year'';
            (2) in paragraph (3), by striking ``or Program Year 3'' and 
        inserting ``, Program Year 3, Program Year 4, Program Year 5, 
        or the final Program Year'';
            (3) in paragraph (6)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C) by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(D) for Program Year 4, the lesser of--
                            ``(i) $17,500,000,000; and
                            ``(ii) the aggregate amount, for all 
                        insurers, of insured losses during such Program 
                        Year;
                    ``(E) for each of Program Year 5 and the Final 
                Program Year, the lesser of--
                            ``(i) $20,000,000,000; and
                            ``(ii) the aggregate amount, for all 
                        insurers, of insured losses during such Program 
                        Year; and''; and
            (4) in paragraph (7)--
                    (A) in subparagraph (A), by striking ``and (C)'' 
                and inserting ``(C), (D), and (E)''; and
                    (B) in subparagraphs (B) and (C), by striking ``or 
                (C)'' each place such term appears and inserting ``(C), 
                (D), or (E)''.
    (e) Coverage of Group Life Insurance.--
            (1) In general.--Paragraph (5) of section 102 of the 
        Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is 
        amended in the matter that precedes subparagraph (A) by 
        inserting ``or group life'' after ``property and casualty''.
            (2) Technical and conforming amendments.--The Terrorism 
        Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
                    (A) in section 102--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (B)(i), by 
                                inserting ``or group life insurance'' 
                                after ``workers' compensation''; and
                                    (II) in subparagraph (B)(ii), by 
                                inserting ``and group life insurance'' 
                                after ``property and casualty 
                                insurance'';
                            (ii) in paragraph (4)--
                                    (I) by inserting ``or for group 
                                life insurance'' after ``property and 
                                casualty insurance''; and
                                    (II) by striking ``paragraph (5)'' 
                                and inserting ``paragraph (6)'';
                            (iii) in paragraph (5), by inserting ``and 
                        group life insurance'' after ``workers' 
                        compensation''; and
                            (iv) in paragraph (6)--
                                    (I) in subparagraph (A)(i), by 
                                inserting ``property and casualty or 
                                group life'' after ``excess'';
                                    (II) in subparagraph (B), by 
                                inserting ``or group life insurance 
                                coverage'' after ``property and 
                                casualty insurance coverage'';
                            (v) by redesignating paragraphs (5) through 
                        (16) as paragraphs (6) through (17), 
                        respectively; and
                            (vi) by inserting after paragraph (4), the 
                        following new paragraph:
            ``(5) Group life insurance.--The term `group life 
        insurance' means an insurance contract that provides term life 
        insurance coverage, accidental death coverage, or a combination 
        thereof, for a number of persons under a single contract, on 
        the basis of a group selection of risks.'';
                    (B) in section 103--
                            (i) in subsection (b)(1), by inserting 
                        ``(including a named beneficiary in the case of 
                        a group life insurance policy)'' before the 
                        second comma;
                            (ii) in subsection (c)--
                                    (I) in paragraph (1) (as so 
                                redesignated by subsection (c)(3) of 
                                this section), by inserting ``and group 
                                life'' after ``property and casualty''; 
                                and
                                    (II) in paragraph (2) (as so 
                                redesignated by subsection (c)(3) of 
                                this section), by inserting ``and group 
                                life'' after ``property and casualty'';
                            (iii) in subsection (e)--
                                    (I) in paragraph (6), by striking 
                                ``For'' and inserting ``Except as 
                                provided in subparagraph (F) of this 
                                paragraph, for'';
                                    (II) in paragraph (6), by inserting 
                                after subparagraph (E) (as added by 
                                subsection (d)(3)(C) of this section) 
                                the following new subparagraph:
                    ``(F) for each of the periods referred to in 
                subparagraphs (A) through (E), the amounts provided 
                under such subparagraphs, as such amounts shall be 
                increased by the Secretary before the expiration of the 
                90-day period beginning on the date of the enactment of 
                the Terrorism Insurance Backstop Extension Act of 2005, 
                based on the increase in the size of the Program caused 
                by the inclusion of group life insurance pursuant to 
                such Act, in proportion to the increased premiums 
                involved.'';
                                    (III) in paragraph (7)(C), by 
                                inserting ``or group life insurance'' 
                                after ``workers compensation'';
                                    (IV) in paragraph (8)(A)(i), by 
                                inserting ``and group life'' after 
                                ``property and casualty''; and
                                    (V) in paragraph (8), by inserting 
                                ``or group life'' after ``property and 
                                casualty'' each place such term appears 
                                in subparagraphs (A)(iii) and (C); and
                            (iv) by striking subsection (h);
                    (C) in section 105(c), by inserting ``or group 
                life'' after ``property and casualty''; and
                    (D) in section 108(d)(1), by inserting ``and the 
                group life insurance industry'' after ``property and 
                casualty insurance industry''.
            (3) Required rulemaking.--Not later than 90 days after the 
        date of the enactment of this Act, the Secretary of the 
        Treasury shall issue final regulations to carry out this 
        subsection.
    (f) Study on Long-Term Solutions.--Section 103 of the Terrorism 
Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended by striking 
subsection (i) and inserting the following new subsection:
    ``(h) Study on Long-Term Solutions.--By September 1, 2005, the 
Secretary shall conduct a study and submit a report to the Congress on 
alternatives for expanding the availability and affordability of 
terrorism insurance after the termination of the Program that do not 
involve a Federal financial backstop.''.
    (g) Termination of Program.--
            (1) Termination.--Subsection (a) of section 108 of the 
        Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is 
        amended by striking ``December 31, 2005'' and inserting 
        ``December 31, 2007''.
            (2) Final gao study and report.--Subsection (d) of 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 new 
        paragraph:
            ``(3) Final gao study and report.--The Comptroller General 
        of the United States shall conduct an assessment of the matters 
        referred to in paragraph (1) and shall submit a report to the 
        Congress, not later than June 30, 2007, on the results of such 
        study.''.

SEC. 3. FINAL PROGRAM YEAR.

    (a) Definition.--Paragraph (11) of 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 by adding at the 
end the following new subparagraph:
                    ``(G) Final program year.--The term `Final Program 
                Year' means the period beginning on January, 1, 2008 
                and ending on December 31, 2008.''. ''.
    (b) Insured Losses.--Paragraph (5) of section 102 of the Terrorism 
Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended by adding 
after and below subparagraph (B) the following new sentence:
        ``With respect to the Final Program Year, such term means only 
        such losses as are described in the preceding sentence that are 
        covered by primary or excess property and casualty insurance or 
        group life insurance, that is issued before January 1, 2008, 
        and expires not later than December 31, 2008; except that the 
        Secretary may exclude from insured losses for the Final Program 
        Year losses covered by a policy for such insurance if the 
        Secretary determines that the primary purpose in establishing 
        the particular term of the policy was obtaining compensation 
        under the Program for losses covered by the policy.''.
    (c) Insurer Deductible.--Paragraph (7) of 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 by 
inserting after subparagraph (F) the following new subparagraph:
                    ``(G) for the Final Program Year, the value of an 
                insurer's direct earned premiums for the terms 
                remaining under any policies for insurance described in 
                the last sentence of paragraph (5) as of the occurrence 
                of the act of terrorism during such Year that results 
                in insured losses, as determined by the Secretary, 
                multiplied by 20 percent; and''.