II 

Calendar No. 438 

113TH CONGRESS 

2D SESSION S. 2244 

To extend the termination date of the Terrorism Insurance Program established under the Terrorism Risk Insurance Act of 2002, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 10, 2014 

Mr. SCHUMER (for himself, Mr. KIRK, Mr. REED, Mr. HELLER, Mr. MURPHY, 

Mr. JOHANNS, Mr. WARNER, Mr. BLUNT, Mr. MENENDEZ, Mr. CRAPO, 

Mr. JOHNSON of South Dakota, Mrs. GILLIBRAND, Mr. ISAKSON, Mr. 

TESTER, Mr. MERKLEY, Mr. BLUMENTHAL, Mr. BOOKER, Ms. MIKULSKI, Mr. DONNELLY, Mr. CHAMBLISS, Mr. MARKEY, Ms. KLOBUCHAR, 

Mr. CARDIN, Mr. DURBIN, and Mr. FRANKEN) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

JUNE 23, 2014 

Reported by Mr. JOHNSON of South Dakota, with amendments 

[Omit the part struck through and insert the part printed in italic] 

A BILL 

To extend the termination date of the Terrorism Insurance 

Program established under the Terrorism Risk Insurance 

Act of 2002, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Terrorism Risk Insur3 ance Program Reauthorization Act of 2014’’. 

4 SEC. 2. EXTENSION OF TERRORISM INSURANCE PROGRAM. 

5 Section 108(a) of the Terrorism Risk Insurance Act 

6 of 2002 (15 U.S.C. 6701 note) is amended by striking 

7 ‘‘December 31, 2014’’ and inserting ‘‘December 31, 

8 2021’’. 

9 SEC. 3. FEDERAL SHARE. 

10 Section 103(e)(1)(A) of the Terrorism Risk Insur11 ance Act of 2002 (15 U.S.C. 6701 note) is amended by 

12 inserting ‘‘and beginning in the calendar year that follows 

13 the date of enactment of the Terrorism Risk Insurance 

14 Program Reauthorization Act of 2014 on January 1, 2016, 

15 shall decrease by 1 percent 1 percentage point per calendar 

16 year until equal to 80 percent’’ after ‘‘85 percent’’. 

17 SEC. 4. RECOUPMENT OF FEDERAL SHARE OF COMPENSA18 TION UNDER THE PROGRAM. 

19 Section 103(e) of the Terrorism Risk Insurance Act 

20 of 2002 (15 U.S.C. 6701 note) is amended— 

21 (1) in paragraph (6), in the matter preceding 

22 subparagraph (A), by striking ‘‘shall be’’ and all 

23 that follows through subparagraph (E) and inserting 

24 ‘‘shall be $27,500,000,000 and beginning in the cal25 endar year that follows the date of enactment of the 

26 Terrorism Risk Insurance Program Reauthorization 

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1 Act of 2014 shall increase by $2,000,000,000 per 

2 calendar year until equal to $37,500,000,000.’’; and 

3 ‘‘shall be the lesser of— 

4 ‘‘(A) $27,500,000,000, as such amount is 

5 adjusted pursuant to this paragraph; and 

6 ‘‘(B) the aggregate amount, for all insurers, 

7 of insured losses during such calendar year, 

8 provided that beginning in the calendar year that fol9 lows the date of enactment of the Terrorism Risk In10 surance Program Reauthorization Act of 2014, the 

11 amount set forth under subparagraph (A) shall in12 crease by $2,000,000,000 per calendar year until 

13 equal to $37,500,000,000.’’; 

14 (2) in paragraph (7)— 

15 (A) in subparagraph (A)— 

16 (i) in the matter preceding clause (i), 

17 by striking ‘‘for each of the periods re18 ferred to in subparagraphs (A) through 

19 (E) of paragraph 6 (6)’’; and 

20 (ii) in clause (i), by striking ‘‘for such 

21 period’’; 

22 (B) in subparagraph (B)— 

23 (i) by striking ‘‘for any period re24 ferred to in any of subparagraphs (A) 

25 through (E) of paragraph (6)’’; and 

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1 (ii) by striking ‘‘for such period’’; 

2 (B) by striking subparagraph (B) and in3 serting the following: 

4 ‘‘(B) [Reserved.]’’; 

5 (C) in subparagraph (C), by striking ‘‘oc6 curring during any of the periods referred to in 

7 any of subparagraphs (A) through (E) of para8 graph (6)’’; and 

9 (C) in subparagraph (C)— 

10 (i) by striking ‘‘occurring during any 

11 of the periods referred to in any of subpara12 graphs (A) through (E) of paragraph (6), 

13 terrorism loss risk-spreading premiums in 

14 an amount equal to 133 percent’’ and in15 serting ‘‘, terrorism loss risk-spreading pre16 miums in an amount equal to 135.5 per17 cent’’; and 

18 (ii) by inserting ‘‘as calculated under 

19 subparagraph (A)’’ after ‘‘mandatory 

20 recoupment amount’’; and 

21 (D) in subparagraph (E)(i)— 

22 (i) in subclause (I)— 

23 (I) by striking ‘‘2010’’ and in24 serting ‘‘2017’’; and 

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1 (II) by striking ‘‘2012’’ and in2 serting ‘‘2019’’; 

3 (ii) in subclause (II)— 

4 (I) by striking ‘‘2011’’ and in5 serting ‘‘2018’’; 

6 (II) by striking ‘‘2012’’ and in7 serting ‘‘2019’’; and 

8 (III) by striking ‘‘2017’’ and in9 serting ‘‘2024’’; and 

10 (iii) in subclause (III)— 

11 (I) by striking ‘‘2012’’ and in12 serting ‘‘2019’’; and 

13 (II) by striking ‘‘2017’’ and in14 serting ‘‘2024’’. 

15 SEC. 5. TECHNICAL AMENDMENTS. 

16 The Terrorism Risk Insurance Act of 2002 (15 

17 U.S.C. 6701 note) is amended— 

18 (1) in section 102— 

19 (A) in paragraph (3)— 

20 (i) by redesignating subparagraphs 

21 (A), (B), and (C) as clauses (i), (ii), and 

22 (iii), respectively; 

23 (ii) in the matter preceding clause (i) 

24 (as so redesignated), by striking ‘‘An entity 

25 has’’ and inserting the following: 

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1 ‘‘(A) IN GENERAL.—An entity has’’; and 

2 (iii) by adding at the end the following 

3 new subparagraph: 

4 ‘‘(B) RULE OF CONSTRUCTION.—An entity, 

5 including any affiliate thereof, does not have 

6 ‘control’ over another entity, if, as of the date of 

7 enactment of the Terrorism Risk Insurance Pro8 gram Reauthorization Act of 2014, the entity is 

9 acting as an attorney-in-fact, as defined by the 

10 Secretary, for the other entity and such other en11 tity is a reciprocal insurer, provided that the en12 tity is not, for reasons other than the attorney13 in-fact relationship, defined as having ‘control’ 

14 under subparagraph (A).’’; 

15 (AB) in paragraph (7)— 

16 (i) by striking subparagraphs (A) 

17 through (F) and inserting the following: 

18 ‘‘(A) the value of an insurer’s direct 

19 earned premiums during the immediately pre20 ceding calendar year, multiplied by 20 percent; 

21 and’’; 

22 (ii) by redesignating subparagraph 

23 (G) as subparagraph (B); and 

24 (iii) in subparagraph (B), as so redes25 ignated by clause (ii)— 

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1 (I) by striking ‘‘notwithstanding 

2 subparagraphs (A) through (F), for 

3 the Transition Period or any Program 

4 Year’’ and inserting ‘‘notwithstanding 

5 subparagraph (A), for any calendar 

6 year’’; and 

7 (II) by striking ‘‘Period or Pro8 gram Year’’ and inserting ‘‘calendar 

9 year’’; 

10 (BC) by striking paragraph (11); and 

11 (CD) by redesignating paragraphs (12) 

12 through (16) as paragraphs (11) through (15), 

13 respectively; and 

14 (2) in section 103— 

15 (A) in subsection (c), by striking ‘‘Pro16 gram Year’’ and inserting ‘‘calendar year’’; 

17 (B) in subsection (e)— 

18 (i) in paragraph (1)— 

19 (I) in subparagraph (A), as pre20 viously amended by section 3— 

21 (aa) by striking ‘‘the Transi22 tion Period and each Program 

23 Year through Program Year 4 

24 shall be equal to 90 percent, and 

25 during Program Year 5 and each 

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1 Program Year thereafter’’ and 

2 inserting ‘‘each calendar year’’; 

3 (bb) by striking the comma 

4 after ‘‘80 percent’’; and 

5 (cc) by striking ‘‘such Tran6 sition Period or such Program 

7 Year’’ and inserting ‘‘such cal8 endar year’’; and 

9 (II) in subparagraph (B), by 

10 striking ‘‘exceed’’ and all that follows 

11 through clause (ii) and inserting ‘‘ex12 ceed $100,000,000 with respect to 

13 such insured losses occurring in the 

14 calendar year.’’; 

15 (ii) in paragraph (2)(A), by striking 

16 ‘‘the period beginning on the first day of 

17 the Transition Period and ending on the 

18 last day of Program Year 1, or during any 

19 Program Year thereafter’’ and inserting ‘‘a 

20 calendar year’’; and 

21 (iii) in paragraph (3), by striking ‘‘the 

22 period beginning on the first day of the 

23 Transition Period and ending on the last 

24 day of Program Year 1, or during any 

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1 other Program Year’’ and inserting ‘‘any 

2 calendar year’’; and 

3 (C) in subsection (g)(2)— 

4 (i) by striking ‘‘the Transition Period 

5 or a Program Year’’ each place that term 

6 appears and inserting ‘‘the calendar year’’; 

7 (ii) by striking ‘‘such period’’ and in8 serting ‘‘the calendar year’’; and 

9 (iii) by striking ‘‘that period’’ and in10 serting ‘‘the calendar year’’. 

11 SEC. 6. IMPROVING THE CERTIFICATION PROCESS. 

12 (a) DEFINITIONS.—As used in this section— 

13 (1) the term ‘‘act of terrorism’’ has the same 

14 meaning as in section 102(1) of the Terrorism Risk 

15 Insurance Act of 2002 (15 U.S.C. 6701 note); 

16 (2) the term ‘‘certification process’’ means the 

17 process by which the Secretary determines whether to 

18 certify an act as an act of terrorism under section 

19 102(1) of the Terrorism Risk Insurance Act of 2002 

20 (15 U.S.C. 6701 note); and 

21 (3) the term ‘‘Secretary’’ means the Secretary of 

22 the Treasury. 

23 (b) STUDY.—Not later than 9 months after the date 

24 of enactment of this Act, the Secretary shall conduct and 

25 complete a study on the certification process. 

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1 (c) REQUIRED CONTENT.—The study required under 

2 subsection (a) shall include an examination and analysis 

3 of— 

4 (1) the establishment of a reasonable timeline by 

5 which the Secretary must make an accurate deter6 mination on whether to certify an act as an act of 

7 terrorism; 

8 (2) the impact that the length of any timeline 

9 proposed to be established under paragraph (1) may 

10 have on the insurance industry, policyholders, con11 sumers, and taxpayers as a whole; 

12 (3) the factors the Secretary would evaluate and 

13 monitor during the certification process, including the 

14 ability of the Secretary to obtain the required infor15 mation regarding the amount of projected and in16 curred losses resulting from an act which the Sec17 retary would need in determining whether to certify 

18 the act as an act of terrorism; 

19 (4) the appropriateness, efficiency, and effective20 ness of the consultation process required under section 

21 102(1)(A) of the Terrorism Risk Insurance Act of 

22 2002 (15 U.S.C. 6701 note) and any recommenda23 tions on changes to the consultation process; and 

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1 (5) the ability of the Secretary to provide guid2 ance and updates to the public regarding any act that 

3 may reasonably be certified as an act of terrorism. 

4 (d) REPORT.—Upon completion of the study required 

5 under subsection (a), the Secretary shall submit a report 

6 on the results of such study to the Committee on Banking, 

7 Housing, and Urban Affairs of the Senate and the Com8 mittee on Financial Services of the House of Representa9 tives. 

10 (e) RULEMAKING.—Section 102(1) of the Terrorism 

11 Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amend12 ed— 

13 (1) by redesignating subparagraph (D) as sub14 paragraph (E); and 

15 (2) by inserting after subparagraph (C) the fol16 lowing: 

17 ‘‘(D) TIMING OF CERTIFICATION.—Not later 

18 than 9 months after the report required under 

19 section 6 of the Terrorism Risk Insurance Pro20 gram Reauthorization Act of 2014 is submitted 

21 to the appropriate committees of Congress, the 

22 Secretary shall issue final rules governing the 

23 certification process, including any timeline ap24 plicable to any certification by the Secretary on 

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1 whether an act is an act of terrorism under this 

2 paragraph.’’. 

3 SEC. 7. GAO STUDY ON UPFRONT PREMIUMS. 

4 (a) STUDY.—Not later than 2 years after the date of 

5 enactment of this Act, the Comptroller General of the United 

6 States shall complete a study on the viability and effects 

7 of the Federal Government assessing and collecting upfront 

8 premiums on insurers that participate in the Terrorism In9 surance Program established under the Terrorism Risk In10 surance Act of 2002 (15 U.S.C. 6701 note) (hereafter in this 

11 section referred to as the ‘‘Program’’). 

12 (b) REQUIRED CONTENT.—The study required under 

13 subsection (a) shall examine, but shall not be limited to, 

14 the following issues: 

15 (1) How the Federal Government could deter16 mine the price of such upfront premiums on insurers 

17 that participate in the Program. 

18 (2) How the Federal Government could collect 

19 and manage such upfront premiums. 

20 (3) How the Federal Government could ensure 

21 that such upfront premiums are not spent for pur22 poses other than claims through the Program. 

23 (4) How the assessment and collection of such 

24 upfront premiums could affect take-up rates for ter25 rorism risk coverage in different regions and indusmstockstill on DSK4VPTVN1PROD with BILLS

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1 tries and how it could impact small businesses and 

2 consumers in both metropolitan and non-metropolitan 

3 areas. 

4 (5) The effect of collecting such upfront pre5 miums on insurers both large and small. 

6 (6) The effect of collecting such upfront pre7 miums on the private market for terrorism risk rein8 surance. 

9 (7) The size of any Federal Government subsidy 

10 insurers may receive through their participation in 

11 the Program, taking into account the Program’s cur12 rent post-event recoupment structure. 

13 (c) REPORT.—Upon completion of the study required 

14 under subsection (a), the Comptroller General shall submit 

15 a report on the results of such study to the Committee on 

16 Banking, Housing, and Urban Affairs of the Senate and 

17 the Committee on Financial Services of the House of Rep18 resentatives. 

19 (d) PUBLIC AVAILABILITY.—The study and report re20 quired under this section shall be made available to the pub21 lic in electronic form and shall be published on the website 

22 of the Government Accountability Office. 

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Calendar No. 438 

113TH CONGRESS 

2D SESSION S. 2244 

A BILL 

To extend the termination date of the Terrorism 

purposes. rorism Risk Insurance Act of 2002, and for other Insurance Program established under the TerJUNE 23, 2014 

Reported with amendments 

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