IB 

Union Calendar No. 478 

108TH CONGRESS 

2D SESSION H. R. 4634 

[Report No. 108–780] 

To extend the terrorism insurance program of the Department of the 

Treasury. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 22, 2004 

Mr. SESSIONS (for himself, Mr. BAKER, Mrs. KELLY, Mr. CANTOR, and Ms. 

PRYCE of Ohio) introduced the following bill; which was referred to the 

Committee on Financial Services 

NOVEMBER 18, 2004 

Additional sponsors: Mr. BLUNT, Mr. ROGERS of Michigan, Mr. 

CUNNINGHAM, Mr. KING of New York, Ms. NORTON, Mrs. CAPITO, Mr. 

TIBERI, Mr. MARSHALL, Mr. SANDLIN, Mr. RYUN of Kansas, Mr. FERGUSON, Mr. WILSON of South Carolina, Ms. GINNY BROWN-WAITE of 

Florida, Mr. GARRETT of New Jersey, Mr. COLLINS, Mr. GREENWOOD, 

Mr. VITTER, Mr. TERRY, Mr. BOEHNER, Mr. GILLMOR, Mr. SHAYS, Mr. 

REYNOLDS, Mr. GORDON, Mr. WOLF, Mr. MCCOTTER, Mr. MORAN of 

Virginia, Mr. LAHOOD, Mr. SHAW, Mrs. JOHNSON of Connecticut, Mr. 

PITTS, Mr. REHBERG, Mr. ENGLISH, Mr. KENNEDY of Minnesota, Mr. 

LARSON of Connecticut, Mr. SIMMONS, Mr. MICA, Mr. GREEN of Wisconsin, Mr. MURPHY, Mr. JONES of North Carolina, Mr. CRANE, Mr. 

FOLEY, Mr. GARY G. MILLER of California, Mr. NETHERCUTT, Mr. 

RENZI, Mr. LATOURETTE, Mr. ISSA, Mr. OSE, Mr. WELLER, Mr. CALVERT, Mr. HASTINGS of Washington, Mr. KLINE, Mr. SMITH of Washington, Mr. KNOLLENBERG, Mr. ISAKSON, Mr. BISHOP of Utah, Mr. 

FRELINGHUYSEN, Mr. BASS, Mr. BURTON of Indiana, Mr. RAMSTAD, Mr. 

HUNTER, Mr. BURGESS, Mr. SAM JOHNSON of Texas, Mr. HALL, Mr. 

THORNBERRY, Ms. GRANGER, Mr. SWEENEY, Mr. BOOZMAN, Mr. PUTNAM, Mr. MILLER of Florida, Mr. FORBES, Mr. CRENSHAW, Mr. KELLER, Mr. EHLERS, Mr. PLATTS, Mr. LUCAS of Oklahoma, Mr. BOEHLERT, Mr. MCHUGH, Mr. LEACH, Mr. LINCOLN DIAZ-BALART of Florida, 

Mr. BONNER, Ms. HARRIS, Mr. BURR, Mr. WELDON of Pennsylvania, 

Mr. BACHUS, Mr. BRADLEY of New Hampshire, Mr. GILCHREST, Mr. 
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SAXTON, Mr. BILIRAKIS, Mrs. BIGGERT, Mr. FOSSELLA, Mr. CANNON, 

Ms. HART, Mr. NEY, Mr. MANZULLO, and Mr. PORTER

Deleted sponsor: Mr. GREEN of Texas (added June 24, 2004; deleted July 13, 

2004) 

NOVEMBER 18, 2004 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on June 22, 2004] 

A BILL 

To extend the terrorism insurance program of the 

Department of the Treasury. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Terrorism Insurance 

5 Backstop Extension Act of 2004’’. 

6 SEC. 2. EXTENSION OF TERRORISM INSURANCE PROGRAM. 

7 (a) PROGRAM YEARS 4 AND 5.—Paragraph (11) of sec8 tion 102 of the Terrorism Risk Insurance Act of 2002 (15 

9 U.S.C. 6701 note) is amended by adding at the end the fol10 lowing new subparagraphs: 

11 ‘‘(E) PROGRAM YEAR 4.—The term ‘Pro12 gram Year 4’ means the period beginning on 

13 January 1, 2006 and ending on December 31, 

14 2006. 
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1 ‘‘(F) PROGRAM YEAR 5.—The term ‘Pro2 gram Year 5’ means the period beginning on 

3 January 1, 2007 and ending on December 31, 

4 2007.’’. 

5 (b) INSURER DEDUCTIBLE.—Paragraph (7) of section 

6 102 of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 

7 6701 note) is amended— 

8 (1) by redesignating subparagraph (E) as sub9 paragraph (G); 

10 (2) in subparagraph (D), by striking ‘‘and’’ at 

11 the end; 

12 (3) by inserting after subparagraph (D) the fol13 lowing new subparagraphs: 

14 ‘‘(E) for Program Year 4, the value of an 

15 insurer’s direct earned premiums over the cal16 endar year immediately preceding Program Year 

17 4, multiplied by 15 percent; 

18 ‘‘(F) for Program Year 5, the value of an 

19 insurer’s direct earned premiums over the cal20 endar year immediately preceding Program Year 

21 4, multiplied by 20 percent; and’’; and 

22 (4) in subparagraph (G) (as so redesignated by 

23 paragraph (1) of this subsection)— 

24 (A) by striking ‘‘(D)’’ and inserting ‘‘(F)’’; 

25 and 
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1 (B) by striking ‘‘or Program Year 3’’ and 

2 inserting ‘‘Program Year 3, Program Year 4, or 

3 Program Year 5’’. 

4 (c) MANDATORY AVAILABILITY.—Subsection (c) of sec5 tion 103 of the Terrorism Risk Insurance Act of 2002 (15 

6 U.S.C. 6701 note) is amended— 

7 (1) by striking all of the matter that precedes 

8 subparagraph (A) of paragraph (1) and inserting the 

9 following: 

10 ‘‘(c) MANDATORY AVAILABILITY.—During the Pro11 gram, each entity that meets the definition of an insurer 

12 under section 102—’’; 

13 (2) by striking paragraph (2); and 

14 (3) by redesignating subparagraphs (A) and (B) 

15 as paragraphs (1) and (2) and realigning such para16 graphs, as so redesignated, so as to be indented 2 ems 

17 from the left margin. 

18 (d) INSURED LOSS SHARED COMPENSATION.—Sub19 section (e) of section 103 of the Terrorism Risk Insurance 

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

21 (1) in paragraph (2)(A), by striking ‘‘or Pro22 gram Year 3’’ and inserting ‘‘, Program Year 3, Pro23 gram Year 4, or Program Year 5’’; 
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1 (2) in paragraph (3), by striking ‘‘or Program 

2 Year 3’’ and inserting ‘‘, Program Year 3, Program 

3 Year 4, or Program Year 5’’; 

4 (3) in paragraph (6)— 

5 (A) in subparagraph (B), by striking ‘‘and’’ 

6 at the end; 

7 (B) in subparagraph (C) by striking the pe8 riod at the end and inserting a semicolon; and 

9 (C) by adding at the end the following new 

10 subparagraphs: 

11 ‘‘(D) for Program Year 4, the lesser of— 

12 ‘‘(i) $17,500,000,000; and 

13 ‘‘(ii) the aggregate amount, for all in14 surers, of insured losses during such Pro15 gram Year; 

16 ‘‘(E) for Program Year 5, the lesser of— 

17 ‘‘(i) $20,000,000,000; and 

18 ‘‘(ii) the aggregate amount, for all in19 surers, of insured losses during such Pro20 gram Year; and’’; and 

21 (4) in paragraph (7)— 

22 (A) in subparagraph (A), by striking ‘‘and 

23 (C)’’ and inserting ‘‘(C), (D), and (E)’’; and 
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1 (B) in subparagraphs (B) and (C), by strik2 ing ‘‘or (C)’’ each place such term appears and 

3 inserting ‘‘(C), (D), or (E)’’. 

4 (e) COVERAGE OF GROUP LIFE INSURANCE.— 

5 (1) IN GENERAL.—Paragraph (5) of section 102 

6 of the Terrorism Risk Insurance Act of 2002 (15 

7 U.S.C. 6701 note) is amended in the matter that pre8 cedes subparagraph (A) by inserting ‘‘or group life’’ 

9 after ‘‘property and casualty’’. 

10 (2) TECHNICAL AND CONFORMING AMEND11 MENTS.—The Terrorism Risk Insurance Act of 2002 

12 (15 U.S.C. 6701 note) is amended— 

13 (A) in section 102— 

14 (i) in paragraph (1)— 

15 (I) in subparagraph (B)(i), by in16 serting ‘‘or group life insurance’’ after 

17 ‘‘workers’ compensation’’; and 

18 (II) in subparagraph (B)(ii), by 

19 inserting ‘‘and group life insurance’’ 

20 after ‘‘property and casualty insur21 ance’’; 

22 (ii) in paragraph (4)— 

23 (I) by inserting ‘‘or for group life 

24 insurance’’ after ‘‘property and cas25 ualty insurance’’; and 
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1 (II) by striking ‘‘paragraph (5)’’ 

2 and inserting ‘‘paragraph (6)’’; 

3 (iii) in paragraph (5), by inserting 

4 ‘‘and group life insurance’’ after ‘‘workers’ 

5 compensation’’; and 

6 (iv) in paragraph (6)— 

7 (I) in subparagraph (A)(i), by in8 serting ‘‘property and casualty or 

9 group life’’ after ‘‘excess’’; 

10 (II) in subparagraph (B), by in11 serting ‘‘or group life insurance cov12 erage’’ after ‘‘property and casualty 

13 insurance coverage’’; 

14 (v) by redesignating paragraphs (5) 

15 through (16) as paragraphs (6) through 

16 (17), respectively; and 

17 (vi) by inserting after paragraph (4), 

18 the following new paragraph: 

19 ‘‘(5) GROUP LIFE INSURANCE.—The term ‘group 

20 life insurance’ means an insurance contract that pro21 vides term life insurance coverage, accidental death 

22 coverage, or a combination thereof, for a number of 

23 persons under a single contract, on the basis of a 

24 group selection of risks.’’; 

25 (B) in section 103— 
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1 (i) in subsection (b)(1), by inserting 

2 ‘‘(including a named beneficiary in the case 

3 of a group life insurance policy)’’ before the 

4 second comma; 

5 (ii) in subsection (c)— 

6 (I) in paragraph (1) (as so redes7 ignated by subsection (c)(3) of this sec8 tion), by inserting ‘‘and group life’’ 

9 after ‘‘property and casualty’’; and 

10 (II) in paragraph (2) (as so redes11 ignated by subsection (c)(3) of this sec12 tion), by inserting ‘‘and group life’’ 

13 after ‘‘property and casualty’’; 

14 (iii) in subsection (e)— 

15 (I) in paragraph (6), by striking 

16 ‘‘For’’ and inserting ‘‘Except as pro17 vided in subparagraph (F) of this 

18 paragraph, for’’; 

19 (II) in paragraph (6), by insert20 ing after subparagraph (E) (as added 

21 by subsection (d)(3)(C) of this section) 

22 the following new subparagraph: 

23 ‘‘(F) for each of the periods referred to in 

24 subparagraphs (A) through (E), the amounts 

25 provided under such subparagraphs, as such 
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1 amounts shall be increased by the Secretary be2 fore the expiration of the 90-day period begin3 ning on the date of the enactment of the Ter4 rorism Insurance Backstop Extension Act of 

5 2004, based on the increase in the size of the 

6 Program caused by the inclusion of group life in7 surance pursuant to such Act, in proportion to 

8 the increased premiums involved.’’; 

9 (III) in paragraph (7)(C), by in10 serting ‘‘or group life insurance’’ after 

11 ‘‘workers compensation’’; 

12 (IV) in paragraph (8)(A)(i), by 

13 inserting ‘‘and group life’’ after ‘‘prop14 erty and casualty’’; and 

15 (V) in paragraph (8), by inserting 

16 ‘‘or group life’’ after ‘‘property and 

17 casualty’’ each place such term appears 

18 in subparagraphs (A)(iii) and (C); 

19 and 

20 (iv) by striking subsection (h); 

21 (C) in section 105(c), by inserting ‘‘or 

22 group life’’ after ‘‘property and casualty’’; and 

23 (D) in section 108(d)(1), by inserting ‘‘and 

24 the group life insurance industry’’ after ‘‘prop25 erty and casualty insurance industry’’. 
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1 (3) REQUIRED RULEMAKING.—Not later than 90 

2 days after the date of the enactment of this Act, the 

3 Secretary of the Treasury shall issue final regulations 

4 to carry out this subsection. 

5 (f) STUDY ON LONG-TERM SOLUTIONS.—Section 103 

6 of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 

7 6701 note) is amended by striking subsection (i) and insert8 ing the following new subsection: 

9 ‘‘(h) STUDY ON LONG-TERM SOLUTIONS.—By June 1, 

10 2005, the Secretary shall conduct a study and submit a re11 port to the Congress on alternatives for expanding the avail12 ability and affordability of terrorism insurance after the 

13 termination of the Program that do not involve a Federal 

14 financial backstop.’’. 

15 (g) TERMINATION OF PROGRAM.— 

16 (1) TERMINATION.—Subsection (a) of section 108 

17 of the Terrorism Risk Insurance Act of 2002 (15 

18 U.S.C. 6701 note) is amended by striking ‘‘December 

19 31, 2005’’ and inserting ‘‘December 31, 2007’’. 

20 (2) FINAL GAO STUDY AND REPORT.—Subsection 

21 (d) of section 108 of the Terrorism Risk Insurance 

22 Act of 2002 (15 U.S.C. 6701 note) is amended by 

23 adding at the end the following new paragraph: 

24 ‘‘(3) FINAL GAO STUDY AND REPORT.—The 

25 Comptroller General of the United States shall con-
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1 duct an assessment of the matters referred to in para2 graph (1) and shall submit a report to the Congress, 

3 not later than June 30, 2007, on the results of such 

4 study.’’. 
Union Calendar No. 478 

108TH CONGRESS 

2D SESSION H. R. 4634 

[Report No. 108–780] 

A BILL 

To extend the terrorism insurance program of the 

Department of the Treasury. 

NOVEMBER 18, 2004 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,