To amend the Terrorism Risk Insurance Act of 2002 to establish a Commission on Terrorism Risk Insurance, and for other purposes.

Summary: Commission on Terrorism Risk Insurance Act - Amends the Terrorism Risk Insurance Act of 2002 to establish the Commission on Terrorism Risk Insurance.

Directs the Commission to identify and make recommendations regarding actions to: (1) encourage, facilitate, and sustain provision by the private domestic insurance industry of affordable coverage for losses due to acts of terrorism; (2) sustain or supplement the ability of the domestic insurance industry to cover losses resulting from acts of terrorism; (3) reduce the federal role over time in any continuing federal terrorism risk insurance program; and (4) evaluate whether coverage under the Terrorism Insurance Program is necessary to permit redevelopment at sites of previous acts of terrorism.

Instructs the Commission to evaluate and makes recommendations on the need for a federal terrorism risk insurance program.

Requires the Terrorism Insurance Program to remain in effect, but only to cover insured losses under property and casualty insurance issued on or before December 31, 2008, if the Commission determines that the market will not provide for renewal or generation of new insurance contracts necessary to permit redevelopment at the site of a previous act of terrorism.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Commission on Terrorism Risk 
Insurance Act of 2005''.

SEC. 2. ESTABLISHMENT OF COMMISSION ON TERRORISM RISK INSURANCE.

    Title I of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 
note) is amended by adding at the end the following new section:

``SEC. 109. COMMISSION ON TERRORISM RISK INSURANCE.

    ``(a) In General.--There is hereby established the Commission on 
Terrorism Risk Insurance (in this section referred to as the 
`Commission').
    ``(b) Membership.--
            ``(1) The Commission shall consist of 11 members, as 
        follows:
                    ``(A) The Secretary of the Treasury or the 
                Secretary's designee.
                    ``(B) One State insurance commissioner designated 
                by the members of the NAIC.
                    ``(C) Nine members appointed by the President, who 
                shall be--
                            ``(i) a representative of State 
                        legislatively created workers' compensation 
                        funds;
                            ``(ii) a representative of property and 
                        casualty insurers with direct written premium 
                        of $1,000,000,000 or less;
                            ``(iii) a representative of property and 
                        casualty insurers with direct written premium 
                        of more than $1,000,000,000;
                            ``(iv) a representative of multiline 
                        insurers;
                            ``(v) a representative of independent 
                        insurance agents;
                            ``(vi) a representative of insurance 
                        brokers;
                            ``(vii) a policyholder representative;
                            ``(viii) a representative of the survivors 
                        of the victims of the attacks of September 11, 
                        2001; and
                            ``(ix) a representative of the reinsurance 
                        industry.
            ``(2) Secretary.--The Program Director of the Terrorism 
        Risk Insurance Act shall serve as Secretary of the Commission. 
        The Secretary of the Commission shall determine the manner in 
        which the Commission shall operate, including funding and 
        staffing.
    ``(c) Duties.--
            ``(1) In general.--The Commission shall identify and make 
        recommendations regarding--
                    ``(A) possible actions to encourage, facilitate, 
                and sustain provision by the private insurance industry 
                in the United States of affordable coverage for losses 
                due to an act or acts of terrorism;
                    ``(B) possible actions or mechanisms to sustain or 
                supplement the ability of the insurance industry in the 
                United States to cover losses resulting from acts of 
                terrorism in the event that--
                            ``(i) such losses jeopardize the capital 
                        and surplus of the insurance industry in the 
                        United States as a whole; or
                            ``(ii) other consequences from such acts 
                        occur, as determined by the Commission, that 
                        may significantly affect the ability of the 
                        insurance industry in the United States to 
                        independently cover such losses; and
                    ``(C) significantly reducing the expected Federal 
                role over time in any continuing Federal terrorism risk 
                insurance program.
            ``(2) Evaluations.--In identifying and making the 
        recommendations required under paragraph (1), the Commission 
        shall specifically evaluate the utility and viability of risk-
        sharing mechanisms under which insurers voluntarily reinsure 
        terrorism losses between and among themselves that are not 
        subject to reimbursement under section 103, a Federally created 
        or mandated reinsurance facility, empowering such a facility to 
        issue pre-event financing bonds, post-event financing bonds, 
        assessments, single or multiple pooling arrangements, and other 
        risk sharing arrangements to accomplish, in whole or in part, 
        the specified objectives.
            ``(3) Redevelopment assessment.--The Commission shall also 
        evaluate whether or not coverage under the Program under this 
        Act is necessary to permit redevelopment at the sites of any 
        previous acts of terrorism. If the Commission determines that 
        the market will not provide for renewal of, or generation of 
        new, insurance contracts necessary to permit such 
        redevelopment, the Commission shall recommend coverage under 
        the Program under this Act, or a variation of such Program, 
        that will facilitate the completion of such a redevelopment 
        project.
            ``(4) Report.--
                    ``(A) In general.--Not later than the date 
                determined under subparagraph (B), the Commission shall 
                submit a report to the Secretary and the Congress 
                that--
                            ``(i) evaluates and makes recommendations 
                        regarding whether there is a need for a Federal 
                        terrorism risk insurance program and, if so, 
                        makes a specific, detailed recommendation for 
                        the replacement of the Program, including 
                        specific, detailed recommendations for the 
                        creation of a terrorism reinsurance facility or 
                        facilities or single or multiple pooling 
                        arrangements, or both; and
                            ``(ii) includes the evaluation, 
                        determination, and any recommendation required 
                        under paragraph (3).
                    ``(B) Timing.--The date determined under this 
                subparagraph is--
                            ``(i) except as provided in clause (ii), 
                        the date that occurs 6 months after the date of 
                        the enactment of this Act; or
                            ``(ii) the date of such termination of the 
                        Program (as so extended), if, before the the 
                        date under clause (i), the date of the 
                        termination of the Program under this Act is 
                        extended to a date that occurs after such date 
                        under clause (i) .''.

SEC. 3. EXTENSION OF PROGRAM TO PROVIDE FOR REDEVELOPMENT OF PREVIOUS 
              TERRORISM SITES.

    Section 108(a) of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) is amended--
            (1) by striking ``(a) Termination of Program.--The 
        Program'' and inserting the following:
    ``(a) Termination of Program.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Program''; and
            (2) by adding at the end the following new paragraphs:
            ``(2) Extension of program to provide for redevelopment of 
        previous terrorism sites.--If the Commission determines in the 
        report submitted to the Secretary pursuant to section 109(c)(4) 
        that the market will not provide for renewal of, or generation 
        of new, insurance contracts necessary to permit redevelopment 
        at the site of a previous act of terrorism, the Program shall 
        remain in effect as provided under paragraph (3) and the 
        Secretary shall immediately take such action as may be 
        necessary to extend the Program in accordance with paragraph 
        (3) and the recommendations of the Commission set forth in such 
        report.
            ``(3) Scope of extended program.--If the Program is 
        extended pursuant to paragraph (2), the Program--
                    ``(A) shall provide coverage, during such 
                extension, only with respect to insured losses under 
                property and casualty insurance coverage (including 
                builder's risk policies) as the Secretary determines is 
                appropriate and in accordance with the recommendations 
                in the report of the Commission under section 
                109(c)(4), to permit redevelopment at the site of a 
                previous act or terrorism; and
                    ``(B) shall remain in effect as provided under 
                subparagraph (A) only with respect to any contracts for 
                such property and casualty insurance in connection with 
                such redevelopment that are issued on or before 
                December 31, 2008.''.

SEC. 4. COVERAGE OF DOMESTIC 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,''.