A bill to extend the applicability of the Terrorism Risk Insurance Act of 2002.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Terrorism Risk Insurance Extension 
Act of 2004''.

SEC. 2. EXTENSION OF TERRORISM RISK INSURANCE PROGRAM.

    (a) Extension of Program Years.--Section 108(a) of the Terrorism 
Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 2336) is 
amended by striking ``2005'' and inserting ``2007''.
    (b) Continuing Authority of the Secretary.--Section 108(b) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 
2336) is amended by striking ``arising out of'' and all that follows 
through ``this title''.

SEC. 3. CONFORMING AMENDMENTS.

    (a) Definitions.--
            (1) Program years.--Section 102(11) of the Terrorism Risk 
        Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 2326) is 
        amended by adding at the end the following:
                    ``(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.
                    ``(G) Other 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, or Program Year 5.''.
            (2) Insured losses.--Section 102(5) of the Terrorism Risk 
        Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 2324) is 
        amended--
                    (A) by inserting ``on or before December 31, 2007, 
                as required by this title,'' before ``if such loss'';
                    (B) by striking ``(A) occurs within'' and inserting 
                the following:
                    ``(A) occurs on or before the earlier of the 
                expiration date of the insurance policy or December 31, 
                2008; and
                    ``(B) occurs--
                            ``(i) within''; and
                    (C) by striking ``occurs to an air carrier'' and 
                inserting the following:
                            ``(ii) to an air carrier''.
            (3) Conforming amendments.--Section 102 of the Terrorism 
        Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 
        2323) is amended--
                    (A) in paragraph (1)(A)(iii)(I), by striking 
                ``(5)(B)'' and inserting ``(5)(B)(ii)''; and
                    (B) in paragraph (4), by striking ``subparagraphs 
                (A) and (B)'' and inserting ``subparagraph (B)''.
    (b) Applicable Insurer Deductibles.--Section 102(7) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 
2325) is amended--
            (1) in subparagraph (D)--
                    (A) by inserting ``and each Program Year 
                thereafter'' before ``, the value''; and
                    (B) by striking ``preceding Program Year 3'' and 
                inserting ``preceding that Program Year''; and
            (2) in subparagraph (E), by striking ``for the Transition'' 
        and all that follows through ``Program Year 3'' and inserting 
        the following: ``for the Transition Period or any Program 
        Year''.
    (c) Continuation of Mandatory Availability.--Section 103(c)(1) of 
the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 
Stat. 2327) is amended--
            (1) by striking ``last day of Program Year 2'' and 
        inserting ``termination date established under section 
        108(a)''; and
            (2) by striking the paragraph heading and inserting ``In 
        general.--''.
    (d) Duration of Policies.--Section 103(c) of the Terrorism Risk 
Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 2327) is 
amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following:
            ``(2) Mandatory duration.--Coverage for insured losses 
        required by paragraph (1) under a policy issued at any time 
        during Program Year 5 shall remain in effect for not less than 
        1 year following the date of issuance of the policy, except 
        that no loss occurring after the earlier of the expiration date 
        of the subject insurance policy or December 31, 2008, shall be 
        considered to be an insured loss for purposes of this title.''.
    (e) Insured Loss Shared Compensation.--Section 103(e) of the 
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 
2328) is amended--
            (1) in paragraph (2)(A), by striking ``ending on'' and all 
        that follows through ``Program Year 3'' and inserting ``ending 
        on the termination date established under section 108(a)''; and
            (2) in paragraph (3), by striking ``ending on'' and all 
        that follows through ``Program Year 3'' and inserting ``ending 
        on the termination date established under section 108(a)''.
    (f) Aggregate Retention Amount.--Section 103(e)(6) of the Terrorism 
Risk Insurance Act of 2002 (15 U.S.C. 6701 note, 116 Stat. 2328) is 
amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following:
                    ``(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; and
                    ``(E) for Program Year 5, the lesser of--
                            ``(i) $20,000,000,000; and
                            ``(ii) the aggregate amount, for all 
                        insurers, of insured losses during such Program 
                        Year.''.

SEC. 4. COVERAGE OF GROUP LIFE INSURANCE.

    Section 103 of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 
6701 note, 116 Stat. 2327) is amended by striking subsection (h) and 
inserting the following:
    ``(h) Applicability to Group Life Insurance.--
            ``(1) In general.--The Secretary shall, by rule, apply the 
        provisions of this title to providers of group life insurance, 
        in the manner determined appropriate by the Secretary, 
        consistent with the purposes of this title.
            ``(2) Consistent application.--The rules of the Secretary 
        under this subsection shall, to the extent practicable, apply 
        the provisions of this title to providers of group life 
        insurance in a similar manner as those provisions apply to an 
        insurer otherwise under this title.
            ``(3) Considerations.--In determining the applicability of 
        this title to providers of group life insurance, and the manner 
        of such application, the Secretary shall consider the overall 
        group life insurance market size, and shall consider the 
        establishment of separate retention amounts for such providers.
            ``(4) Rulemaking required.--Not later than 90 days after 
        the date of enactment of the Terrorism Risk Insurance Extension 
        Act of 2004, the Secretary shall issue final regulations to 
        carry out this subsection.
            ``(5) Rule of construction.--Nothing in this subsection may 
        be construed to affect or otherwise alter the applicability of 
        this title to any insurer, as defined in section 102.
            ``(6) Definition.--As used in this subsection, 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.''.

SEC. 5. RECOMMENDATIONS FOR LONG-TERM SOLUTIONS.

    Section 108 of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 
6701 note, 116 Stat. 2328) is amended by adding at the end the 
following:
    ``(e) Recommendations for Long-Term Solutions.--The Presidential 
Working Group on Financial Markets shall, in consultation with the 
NAIC, representatives of the insurance industry, and representatives of 
policy holders, not later than June 30, 2006, submit a report to 
Congress containing recommendations for legislation to address the 
long-term availability and affordability of insurance for terrorism 
risk.''.

Summary: Terrorism Insurance Extension Act of 2004 - Amends the Terrorism Risk Insurance Act of 2002 (TRIA) to extend the terrorism risk insurance program from 2005 through 2007. Repeals the condition on the authority of the Secretary of the Treasury to pay or adjust compensation for insured losses after termination of the program that limits such losses to those arising from an act of terrorism occurring only during the period in which the program was in effect. Defines Program Year 4 as calendar 2006 and Program Year 5 as calendar 2007. Increases the insurance marketplace aggregate retention amount for Program Years 4 and 5. Directs the Secretary to apply TRIA to providers of group life insurance. Instructs the Presidential Working Group on Financial Markets to report to Congress its recommendations for legislation to address the long-term availability and affordability of insurance for terrorism risk.