109TH CONGRESS

1ST SESSION S. 467

AN ACT

To extend the applicability of the Terrorism Risk Insurance

Act of 2002.

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 Risk Insur5 ance Extension Act of 2005’’.
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1 SEC. 2. EXTENSION OF TERRORISM RISK INSURANCE PRO2 GRAM.

3 (a) PROGRAM EXTENSION.—Section 108(a) of the

4 Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701

5 note; 116 Stat. 2336) is amended by striking ‘‘2005’’ and

6 inserting ‘‘2007’’.

7 (b) MANDATORY AVAILABILITY.—Section 103(c) of

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

9 6701 note; 116 Stat. 2327) is amended—

10 (1) by striking paragraph (2);

11 (2) by striking ‘‘AVAILABILITY.—’’ and all

12 that follows through ‘‘each entity’’ and inserting

13 ‘‘AVAILABILITY.—During each Program Year, each

14 entity’’; and

15 (3) by redesignating subparagraphs (A) and

16 (B) as paragraphs (1) and (2), respectively, and

17 moving the margins 2 ems to the left.

18 SEC. 3. AMENDMENTS TO DEFINED TERMS.

19 (a) COVERED ACTS OF TERRORISM.—Section

20 102(1)(B)(ii) of the Terrorism Risk Insurance Act of

21 2002 (15 U.S.C. 6701 note; 116 Stat. 2324) is amended

22 by inserting before the period ‘‘, with respect to an act

23 occurring before Program Year 4, $50,000,000 with re24 spect to an act occurring in Program Year 4, or

25 $100,000,000 with respect to an act occurring in Program

26 Year 5’’.
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1 (b) PROGRAM YEARS.—Section 102(11) of the Ter2 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note;

3 116 Stat. 2326) is amended by adding at the end the fol4 lowing:

5 ‘‘(E) PROGRAM YEAR 4.—The term ‘Pro6 gram Year 4’ means the period beginning on

7 January 1, 2006 and ending on December 31,

8 2006.

9 ‘‘(F) PROGRAM YEAR 5.—The term ‘Pro10 gram Year 5’ means the period beginning on

11 January 1, 2007 and ending on December 31,

12 2007.’’.

13 (c) EXCLUSIONS FROM COVERED LINES.—

14 (1) IN GENERAL.—Section 102(12)(B) of the

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

16 6701 note; 116 Stat. 2326) is amended—

17 (A) in clause (vi), by striking ‘‘or’’ at the

18 end;

19 (B) in clause (vii), by striking the period

20 at the end and inserting a semicolon; and

21 (C) by adding at the end the following:

22 ‘‘(viii) commercial automobile insur23 ance;

24 ‘‘(ix) burglary and theft insurance;

25 ‘‘(x) surety insurance;
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1 ‘‘(xi) professional liability insurance;

2 or

3 ‘‘(xii) farm owners multiple peril in4 surance.’’.

5 (2) CONFORMING AMENDMENT.—Section

6 102(12)(A) of the Terrorism Risk Insurance Act of

7 2002 (15 U.S.C. 6701 note; 116 Stat. 2326) is

8 amended by striking ‘‘surety insurance’’ and insert9 ing ‘‘directors and officers liability insurance’’.

10 (d) INSURER DEDUCTIBLES.—Section 102(7) of the

11 Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701

12 note; 116 Stat. 2325) is amended—

13 (1) in subparagraph (D), by striking ‘‘and’’ at

14 the end;

15 (2) by redesignating subparagraph (E) as sub16 paragraph (G);

17 (3) by inserting after subparagraph (D), the

18 following:

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

20 insurer’s direct earned premiums over the cal21 endar year immediately preceding Program

22 Year 4, multiplied by 17.5 percent;

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

24 insurer’s direct earned premiums over the cal-
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1 endar year immediately preceding Program

2 Year 5, multiplied by 20 percent; and’’; and

3 (4) in subparagraph (G), as so redesignated, by

4 striking ‘‘through (D)’’ and all that follows through

5 ‘‘Year 3’’and inserting the following: ‘‘through (F),

6 for the Transition Period or any Program Year’’.

7 SEC. 4. INSURED LOSS SHARED COMPENSATION.

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

9 of 2002 (15 U.S.C. 6701 note; 116 Stat. 2328) is

10 amended—

11 (1) in paragraph (1)—

12 (A) by inserting ‘‘through Program Year

13 4’’ before ‘‘shall be equal’’; and

14 (B) by inserting ‘‘, and during Program

15 Year 5 shall be equal to 85 percent,’’ after ‘‘90

16 percent’’; and

17 (2) in each of paragraphs (2) and (3), by strik18 ing ‘‘Program Year 2 or Program Year 3’’ each

19 place that term appears and inserting ‘‘any of Pro20 gram Years 2 through 5’’.

21 SEC. 5. AGGREGATE RETENTION AMOUNTS AND

22 RECOUPMENT OF FEDERAL SHARE.

23 (a) AGGREGATE RETENTION AMOUNTS.—Section

24 103(e)(6) of the Terrorism Risk Insurance Act of 2002

25 (15 U.S.C. 6701 note; 116 Stat. 2329) is amended—
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1 (1) in subparagraph (B), by striking ‘‘and’’ at

2 the end;

3 (2) in subparagraph (C), by striking the period

4 at the end and inserting a semicolon; and

5 (3) by adding at the end the following:

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

7 ‘‘(i) $17,500,000,000; and

8 ‘‘(ii) the aggregate amount, for all in9 surers, of insured losses during such Pro10 gram Year; and

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

12 ‘‘(i) $20,000,000,000; and

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

16 (b) RECOUPMENT OF FEDERAL SHARE.—Section

17 103(e)(7) of the Terrorism Risk Insurance Act of 2002

18 (15 U.S.C. 6701 note; 116 Stat. 2329) is amended—

19 (1) in subparagraph (A), by striking ‘‘, (B),

20 and (C)’’ and inserting ‘‘through (E)’’; and

21 (2) in each of subparagraphs (B) and (C), by

22 striking ‘‘subparagraph (A), (B), or (C)’’ each place

23 that term appears and inserting ‘‘any of subpara24 graphs (A) through (E)’’.
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1 SEC. 6. LITIGATION MANAGEMENT.

2 Section 107(a) of the Terrorism Risk Insurance Act

3 of 2002 (15 U.S.C. 6701 note; 116 Stat. 2335) is amend4 ed by adding at the end the following:

5 ‘‘(6) AUTHORITY OF THE SECRETARY.—Proce6 dures and requirements established by the Secretary

7 under section 50.82 of part 50 of title 31 of the

8 Code of Federal Regulations (as in effect on the

9 date of issuance of that section in final form) shall

10 apply to any cause of action described in paragraph

11 (1) of this subsection.’’.

12 SEC. 7. ANALYSIS AND REPORT ON TERRORISM RISK COV13 ERAGE CONDITIONS AND SOLUTIONS.

14 Section 108 of the Terrorism Risk Insurance Act of

15 2002 (15 U.S.C. 6701 note; 116 Stat. 2336) is amended

16 by adding at the end the following:

17 ‘‘(e) ANALYSIS OF MARKET CONDITIONS FOR TER18 RORISM RISK INSURANCE.—

19 ‘‘(1) IN GENERAL.—The President’s Working

20 Group on Financial Markets, in consultation with

21 the National Association of Insurance Commis22 sioners, representatives of the insurance industry,

23 representatives of the securities industry, and rep24 resentatives of policy holders, shall perform an anal25 ysis regarding the long-term availability and afford26 ability of insurance for terrorism risk, including—
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1 ‘‘(A) group life coverage; and

2 ‘‘(B) coverage for chemical, nuclear, bio3 logical, and radiological events.

4 ‘‘(2) REPORT.—Not later than September 30,

5 2006, the President’s Working Group on Financial

6 Markets shall submit a report to the Committee on

7 Banking, Housing, and Urban Affairs of the Senate

8 and the Committee on Financial Services of the

9 House of Representatives on its findings pursuant to

10 the analysis conducted under subsection (a).’’.

Passed the Senate November 18 (legislative day, November 17), 2005.

Attest:

Secretary.
109TH CONGRESS

1ST SESSION S. 467

AN ACT

To extend the applicability of the Terrorism Risk

Insurance Act of 2002.