II 

Calendar No. 287 

109TH CONGRESS 

1ST SESSION S. 467 

To extend the applicability of the Terrorism Risk Insurance Act of 2002. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 18, 2005 

Mr. DODD (for himself, Mr. BENNETT, Mr. SCHUMER, Mr. HAGEL, Mr. 

CORZINE, Mr. BUNNING, Mr. REED, Mr. LUGAR, Mrs. CLINTON, Mr. 

NELSON of Nebraska, Mr. CARPER, Mrs. DOLE, Mr. CHAMBLISS, Mr. 

LAUTENBERG, Mr. BAYH, Ms. STABENOW, Mr. CHAFEE, Mr. 

LIEBERMAN, Mr. SALAZAR, Mr. OBAMA, Mr. KERRY, Mr. ALLEN, Mr. 

DURBIN, Mr. COLEMAN, Mrs. MURRAY, Mr. REID, Mr. DAYTON, Mr. 

BYRD, Mr. CONRAD, Mr. SMITH, Mr. BINGAMAN, Mr. JOHNSON, Mr. 

KENNEDY, and Mr. TALENT) introduced the following bill; which was 

read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

NOVEMBER 16, 2005 

Reported by Mr. SHELBY, with an amendment 

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

A BILL 

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, 
2 

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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Terrorism Risk Insur3 ance Extension Act of 2005.’’. 

4 SEC. 2. EXTENSION OF TERRORISM RISK INSURANCE PRO5 GRAM. 

6 (a) EXTENSION OF PROGRAM YEARS.—Section 

7 108(a) of the Terrorism Risk Insurance Act of 2002 (15 

8 U.S.C. 6701 note, 116 Stat. 2336) is amended by striking 

9 ‘‘2005’’ and inserting ‘‘2007’’. 

10 (b) CONTINUING AUTHORITY OF THE SECRETARY.— 

11 Section 108(b) of the Terrorism Risk Insurance Act of 

12 2002 (15 U.S.C. 6701 note, 116 Stat. 2336) is amended 

13 by striking ‘‘arising out of’’ and all that follows through 

14 ‘‘this title’’. 

15 SEC. 3. CONFORMING AMENDMENTS. 

16 (a) DEFINITIONS.— 

17 (1) PROGRAM YEARS.—Section 102(11) of the 

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

19 6701 note, 116 Stat. 2326) is amended by adding 

20 at the end the following: 

21 ‘‘(E) PROGRAM YEAR 4.—The term ‘Pro22 gram Year 4’ means the period beginning on 

23 January 1, 2006 and ending on December 31, 

24 2006. 

25 ‘‘(F) PROGRAM YEAR 5.—The term ‘Pro26 gram Year 5’ means the period beginning on 
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1 January 1, 2007 and ending on December 31, 

2 2007. 

3 ‘‘(G) OTHER PROGRAM YEARS.—Except 

4 when used as provided in subparagraphs (B) 

5 through (F), the term ‘Program Year’ means, 

6 as the context requires, any of Program Year 1, 

7 Program Year 2, Program Year 3, Program 

8 Year 4, or Program Year 5.’’. 

9 (2) INSURED LOSSES.—Section 102(5) of the 

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

11 6701 note, 116 Stat. 2324) is amended— 

12 (A) by inserting ‘‘on or before December 

13 31, 2007, as required by this title,’’ before ‘‘if 

14 such loss’’; 

15 (B) by striking ‘‘(A) occurs within’’ and 

16 inserting the following: 

17 ‘‘(A) occurs on or before the earlier of the 

18 expiration date of the insurance policy or De19 cember 31, 2008; and 

20 ‘‘(B) occurs— 

21 ‘‘(i) within’’; and 

22 (C) by striking ‘‘occurs to an air carrier’’ 

23 and inserting the following: 

24 ‘‘(ii) to an air carrier’’. 
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1 (3) CONFORMING AMENDMENTS.—Section 102 

2 of the Terrorism Risk Insurance Act of 2002 (15 

3 U.S.C. 6701 note, 116 Stat. 2323) is amended— 

4 (A) in paragraph (1)(A)(iii)(I), by striking 

5 ‘‘(5)(B)’’ and inserting ‘‘(5)(B)(ii)’’; and 

6 (B) in paragraph (4), by striking ‘‘sub7 paragraphs (A) and (B)’’ and inserting ‘‘sub8 paragraph (B)’’. 

9 (b) APPLICABLE INSURER DEDUCTIBLES.—Section 

10 102(7) of the Terrorism Risk Insurance Act of 2002 (15 

11 U.S.C. 6701 note, 116 Stat. 2325) is amended— 

12 (1) in subparagraph (D)— 

13 (A) by inserting ‘‘and each Program Year 

14 thereafter’’ before ‘‘, the value’’; and 

15 (B) by striking ‘‘preceding Program Year 

16 3’’ and inserting ‘‘preceding that Program 

17 Year’’; and 

18 (2) in subparagraph (E), by striking ‘‘for the 

19 Transition’’ and all that follows through ‘‘Program 

20 Year 3’’ and inserting the following: ‘‘for the Transi21 tion Period or any Program Year’’. 

22 (c) CONTINUATION OF MANDATORY AVAILABILITY.— 

23 Section 103(c)(1) of the Terrorism Risk Insurance Act of 

24 2002 (15 U.S.C. 6701 note, 116 Stat. 2327) is amend25 ed— 
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1 (1) by striking ‘‘last day of Program Year 2’’ 

2 and inserting ‘‘termination date established under 

3 section 108(a)’’; and 

4 (2) by striking the paragraph heading and in5 serting ‘‘IN GENERAL.—’’. 

6 (d) DURATION OF POLICIES.—Section 103(c) of the 

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

8 note, 116 Stat. 2327) is amended— 

9 (1) by redesignating paragraph (2) as para10 graph (3); and 

11 (2) by inserting after paragraph (1) the fol12 lowing: 

13 ‘‘(2) MANDATORY DURATION.—Coverage for in14 sured losses required by paragraph (1) under a pol15 icy issued at any time during Program Year 5 shall 

16 remain in effect for not less than 1 year following 

17 the date of issuance of the policy, except that no loss 

18 occurring after the earlier of the expiration date of 

19 the subject insurance policy or December 31, 2008, 

20 shall be considered to be an insured loss for pur21 poses of this title.’’. 

22 (e) INSURED LOSS SHARED COMPENSATION.—Sec23 tion 103(e) of the Terrorism Risk Insurance Act of 2002 

24 (15 U.S.C. 6701 note, 116 Stat. 2328) is amended— 
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1 (1) in paragraph (2)(A), by striking ‘‘ending 

2 on’’ and all that follows through ‘‘Program Year 3’’ 

3 and inserting ‘‘ending on the termination date estab4 lished under section 108(a)’’; and 

5 (2) in paragraph (3), by striking ‘‘ending on’’ 

6 and all that follows through ‘‘Program Year 3’’ and 

7 inserting ‘‘ending on the termination date estab8 lished under section 108(a)’’. 

9 (f) AGGREGATE RETENTION AMOUNT.—Section 

10 103(e)(6) of the Terrorism Risk Insurance Act of 2002 

11 (15 U.S.C. 6701 note, 116 Stat. 2328) is amended— 

12 (1) in subparagraph (B), by striking ‘‘and’’ at 

13 the end; 

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

15 at the end and inserting a semicolon; and 

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

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

18 ‘‘(i) $17,500,000,000; and 

19 ‘‘(ii) the aggregate amount, for all in20 surers, of insured losses during such Pro21 gram Year; and 

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

23 ‘‘(i) $20,000,000,000; and 
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1 ‘‘(ii) the aggregate amount, for all in2 surers, of insured losses during such Pro3 gram Year.’’. 

4 SEC. 4. COVERAGE OF GROUP LIFE INSURANCE. 

5 Section 103 of the Terrorism Risk Insurance Act of 

6 2002 (15 U.S.C. 6701 note, 116 Stat. 2327) is amended 

7 by striking subsection (h) and inserting the following: 

8 ‘‘(h) APPLICABILITY TO GROUP LIFE INSURANCE.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall, by 

10 rule, apply the provisions of this title to providers of 

11 group life insurance, in the manner determined ap12 propriate by the Secretary, consistent with the pur13 poses of this title. 

14 ‘‘(2) CONSISTENT APPLICATION.—The rules of 

15 the Secretary under this subsection shall, to the ex16 tent practicable, apply the provisions of this title to 

17 providers of group life insurance in a similar manner 

18 as those provisions apply to an insurer otherwise 

19 under this title. 

20 ‘‘(3) CONSIDERATIONS.—In determining the ap21 plicability of this title to providers of group life in22 surance, and the manner of such application, the 

23 Secretary shall consider the overall group life insur24 ance market size, and shall consider the establish-
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1 ment of separate retention amounts for such pro2 viders. 

3 ‘‘(4) RULEMAKING REQUIRED.—Not later than 

4 90 days after the date of enactment of the Ter5 rorism Risk Insurance Extension Act of 2005, the 

6 Secretary shall issue final regulations to carry out 

7 this subsection. 

8 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

9 this subsection may be construed to affect or other10 wise alter the applicability of this title to any in11 surer, as defined in section 102. 

12 ‘‘(6) DEFINITION.—As used in this subsection, 

13 the term ‘group life insurance’ means an insurance 

14 contract that provides term life insurance coverage, 

15 accidental death coverage, or a combination thereof, 

16 for a number of persons under a single contract, on 

17 the basis of a group selection of risks.’’. 

18 SEC. 5. RECOMMENDATIONS FOR LONG-TERM SOLUTIONS. 

19 Section 108 of the Terrorism Risk Insurance Act of 

20 2002 (15 U.S.C. 6701 note, 116 Stat. 2328) is amended 

21 by adding at the end the following: 

22 ‘‘(e) RECOMMENDATIONS FOR LONG-TERM SOLU23 TIONS.—The Presidential Working Group on Financial 

24 Markets shall, in consultation with the NAIC, representa25 tives of the insurance industry, and representatives of pol-
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1 icy holders, not later than June 30, 2006, submit a report 

2 to Congress containing recommendations for legislation to 

3 address the long-term availability and affordability of in4 surance for terrorism risk.’’. 

5 SECTION 1. SHORT TITLE. 

6 This Act may be cited as the ‘‘Terrorism Risk Insur7 ance Extension Act of 2005’’. 

8 SEC. 2. EXTENSION OF TERRORISM RISK INSURANCE PRO9 GRAM. 

10 (a) PROGRAM EXTENSION.—Section 108(a) of the Ter11 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note; 

12 116 Stat. 2336) is amended by striking ‘‘2005’’ and insert13 ing ‘‘2007’’. 

14 (b) MANDATORY AVAILABILITY.—Section 103(c) of the 

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

16 note; 116 Stat. 2327) is amended— 

17 (1) by striking paragraph (2); 

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

19 follows through ‘‘each entity’’ and inserting ‘‘AVAIL20 ABILITY.—During each Program Year, each entity’’; 

21 and 

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

23 as paragraphs (1) and (2), respectively, and moving 

24 the margins 2 ems to the left. 
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1 SEC. 3. AMENDMENTS TO DEFINED TERMS. 

2 (a) COVERED ACTS OF TERRORISM.—Section 

3 102(1)(B)(ii) of the Terrorism Risk Insurance Act of 2002 

4 (15 U.S.C. 6701 note; 116 Stat. 2324) is amended by insert5 ing before the period ‘‘, with respect to an act occurring 

6 before Program Year 4, $50,000,000 with respect to an act 

7 occurring in Program Year 4, or $100,000,000 with respect 

8 to an act occurring in Program Year 5’’. 

9 (b) PROGRAM YEARS.—Section 102(11) of the Ter10 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note; 

11 116 Stat. 2326) is amended by adding at the end the fol12 lowing: 

13 ‘‘(E) PROGRAM YEAR 4.—The term ‘Pro14 gram Year 4’ means the period beginning on 

15 January 1, 2006 and ending on December 31, 

16 2006. 

17 ‘‘(F) PROGRAM YEAR 5.—The term ‘Pro18 gram Year 5’ means the period beginning on 

19 January 1, 2007 and ending on December 31, 

20 2007.’’. 

21 (c) EXCLUSIONS FROM COVERED LINES.— 

22 (1) IN GENERAL.—Section 102(12)(B) of the Ter23 rorism Risk Insurance Act of 2002 (15 U.S.C. 6701 

24 note; 116 Stat. 2326) is amended— 

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

26 end; 
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1 (B) in clause (vii), by striking the period at 

2 the end and inserting a semicolon; and 

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

4 ‘‘(viii) commercial automobile insur5 ance; 

6 ‘‘(ix) burglary and theft insurance; 

7 ‘‘(x) surety insurance; 

8 ‘‘(xi) professional liability insurance; 

9 or 

10 ‘‘(xii) farm owners multiple peril in11 surance.’’. 

12 (2) CONFORMING AMENDMENTS.—Section 

13 102(12)(A) of the Terrorism Risk Insurance Act of 

14 2002 (15 U.S.C. 6701 note; 116 Stat. 2326) is amend15 ed— 

16 (A) by striking ‘‘, and surety insurance’’; 

17 and 

18 (B) by striking ‘‘, worker’s’’ and inserting 

19 ‘‘and worker’s’’. 

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

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

22 note; 116 Stat. 2325) is amended— 

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

24 the end; 
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1 (2) by redesignating subparagraph (E) as sub2 paragraph (G); 

3 (3) by inserting after subparagraph (D), the fol4 lowing: 

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

6 insurer’s direct earned premiums over the cal7 endar year immediately preceding Program Year 

8 4, multiplied by 17.5 percent; 

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

10 insurer’s direct earned premiums over the cal11 endar year immediately preceding Program Year 

12 5, multiplied by 20 percent; and’’; and 

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

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

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

16 the Transition Period or any Program Year’’. 

17 SEC. 4. INSURED LOSS SHARED COMPENSATION. 

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

19 2002 (15 U.S.C. 6701 note; 116 Stat. 2328) is amended— 

20 (1) in paragraph (1)— 

21 (A) by inserting ‘‘through Program Year 4’’ 

22 before ‘‘shall be equal’’; and 

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

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

25 percent’’; and 
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1 (2) in each of paragraphs (2) and (3), by strik2 ing ‘‘Program Year 2 or Program Year 3’’ each place 

3 that term appears and inserting ‘‘any of Program 

4 Years 2 through 5’’. 

5 SEC. 5. AGGREGATE RETENTION AMOUNTS AND 

6 RECOUPMENT OF FEDERAL SHARE. 

7 (a) AGGREGATE RETENTION AMOUNTS.—Section 

8 103(e)(6) of the Terrorism Risk Insurance Act of 2002 (15 

9 U.S.C. 6701 note; 116 Stat. 2329) is amended— 

10 (1) in subparagraph (B), by striking ‘‘and’’ at 

11 the end; 

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

13 at the end and inserting a semicolon; and 

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

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

16 ‘‘(i) $17,500,000,000; and 

17 ‘‘(ii) the aggregate amount, for all in18 surers, of insured losses during such Pro19 gram Year; and 

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

21 ‘‘(i) $20,000,000,000; and 

22 ‘‘(ii) the aggregate amount, for all in23 surers, of insured losses during such Pro24 gram Year.’’. 
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1 (b) RECOUPMENT OF FEDERAL SHARE.—Section 

2 103(e)(7) of the Terrorism Risk Insurance Act of 2002 (15 

3 U.S.C. 6701 note; 116 Stat. 2329) is amended— 

4 (1) in subparagraph (A), by striking ‘‘, (B), and 

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

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

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

8 that term appears and inserting ‘‘any of subpara9 graphs (A) through (E)’’. 

10 SEC. 6. LITIGATION MANAGEMENT. 

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

12 of 2002 (15 U.S.C. 6701 note; 116 Stat. 2335) is amended 

13 by adding at the end the following: 

14 ‘‘(6) AUTHORITY OF THE SECRETARY.—Proce15 dures and requirements established by the Secretary 

16 under section 50.82 of part 50 of title 31 of the Code 

17 of Federal Regulations (as in effect on the date of 

18 issuance of that section in final form) shall apply to 

19 any cause of action described in paragraph (1) of this 

20 subsection.’’. 

21 SEC. 7. ANALYSIS AND REPORT ON TERRORISM RISK COV22 ERAGE CONDITIONS AND SOLUTIONS. 

23 Section 108 of the Terrorism Risk Insurance Act of 

24 2002 (15 U.S.C. 6701 note; 116 Stat. 2336) is amended 

25 by adding at the end the following: 
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1 ‘‘(e) ANALYSIS OF MARKET CONDITIONS FOR TER2 RORISM RISK INSURANCE.— 

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

4 Group on Financial Markets, in consultation with the 

5 National Association of Insurance Commissioners, 

6 representatives of the insurance industry, representa7 tives of the securities industry, and representatives of 

8 policy holders, shall perform an analysis regarding 

9 the long-term availability and affordability of insur10 ance for terrorism risk, including— 

11 ‘‘(A) group life coverage; and 

12 ‘‘(B) coverage for chemical, nuclear, biologi13 cal, and radiological events. 

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

15 2006, the President’s Working Group on Financial 

16 Markets shall submit a report to the Committee on 

17 Banking, Housing, and Urban Affairs of the Senate 

18 and the Committee on Financial Services of the 

19 House of Representatives on its findings pursuant to 

20 the analysis conducted under subsection (a).’’. 
Calendar No. 287 

109TH CONGRESS 

1ST SESSION S. 467 

A BILL 

To extend the applicability of the Terrorism Risk 

Insurance Act of 2002. 

NOVEMBER 16, 2005 

Reported with an amendment