(4) such uncertainty threatens the continued
availability of United States commercial property
casualty insurance for terrorism risk at meaningful
coverage levels;
(5) the unavailability of affordable commercial
property and casualty insurance for terrorist acts
threatens the growth and stability of the United
States economy, including impeding the ability of fi-
nancial services providers to finance commercial
property acquisitions and new construction;
(6) in the past, the private insurance markets
have shown a remarkable resiliency in adapting to
changed circumstances;
(7) given time, the private markets will diver-
sify and develop risk spreading mechanisms to in-
crease capacity and guard against possible future
losses incurred by terrorist attacks;
(8) it is necessary to create a temporary indus-
try risk sharing loan program to ensure the contin-
ued availability of commercial property and casualty
insurance and reinsurance for terrorism-related
risks;
(9) such action is necessary to limit immediate
market disruptions, encourage economic stabiliza-
tion, and facilitate a transition to a viable market
for private terrorism risk insurance; and
(10) in addition, it is necessary to repeal por-
tions of the tax law which prohibit the insurance
market from developing the necessary reserves to
handle possible future losses due to acts of ter-
rorism.
SEC. 3. DESIGNATION OF ADMINISTRATORS.
(a) IN GENERAL.—Not later than December 1, 2001,
the President shall designate a Federal officer or officers
to act as the Administrator or Administrators responsible
for carrying out this Act and the responsibilities under
this Act to be carried out by each such officer.
(b) SENSE OF CONGRESS.—It is the sense of the
Congress that in determining the Administrator respon-
sible for making any determinations, for purposes of this
Act, as to whether a loss was caused by an act of terrorism
and whether such loss was caused by one or multiple such
events, pursuant to section 5(b), the President should con-
sider the appropriate role of the Assistant to the President
for Homeland Security.
SEC. 4. SUBMISSION OF PREMIUM INFORMATION TO AD-
MINISTRATOR.
To the extent such information is not otherwise avail-
able to the Administrators, the appropriate Administrator
may require each insurer to submit, to the appropriate Ad-
ministrator or to the NAIC, a statement specifying the
aggregate premium amount of coverage written by such
insurer for properties and persons in the United States
under each line of commercial property and casualty insur-
ance sold by such insurer during such periods as the ap-
propriate Administrator may provide.
SEC. 5. TRIGGERING DETERMINATION AND COVERED PE-
RIOD.
(a) IN GENERAL.—For purposes of this Act, a ‘‘trig-
gering determination’’ is a determination by the appro-
priate Administrator that the insured losses resulting from
the event of an act of terrorism occurring during the cov-
ered period (as such term is defined in subsection (b)),
or the aggregate insured losses resulting from multiple
events of acts of terrorism all occurring during the covered
period, meet the requirements under either of the fol-
lowing paragraphs:
(1) INDUSTRY-WIDE LOSS TEST.—Such indus-
try-wide losses exceed $1,000,000,000.
(2) CAPITAL SURPLUS AND INDUSTRY AGGRE-
GATE
TEST.—Such industry-wide losses exceed
$100,000,000 and some portion of such losses for
any single commercial insurer exceed—
(A) 10 percent of the capital surplus of
such commercial insurer (as such term is de-
fined by the appropriate Administrator); and
(B) 10 percent of the commercial property
and casualty premiums written by such com-
mercial insurer;
except that this paragraph shall not apply to any
commercial insurer that has been making commer-
cial property and casualty insurance coverage avail-
able for less than 4 years as of the date of the deter-
mination under this subsection.
(b) COVERED PERIOD.—For purposes of this Act, the
‘‘covered period’’ is the period beginning on the date of
the enactment of this Act and ending on January 1, 2003.
(c) DETERMINATIONS REGARDING EVENTS.—For
purposes of subsection (a), the appropriate Administrator
shall have the sole authority for determining whether—
(1) an occurrence or event was caused by an act
of terrorism;
(2) insured losses from acts of terrorism were
caused by one or multiple events or occurrences; and
(3) whether an act of terrorism occurred during
the covered period.
SEC. 6. FEDERAL COST-SHARING FOR COMMERCIAL INSUR-
ERS.
(a) IN GENERAL.—Pursuant to a triggering deter-
mination, the appropriate Administrator shall provide fi-
nancial assistance to commercial insurers in accordance
with this section to cover insured losses resulting from
acts of terrorism, which shall be repaid in accordance with
subsection (e).
(b) AMOUNT.—Subject to subsection (c), with respect
to a triggering determination, the amount of financial as-
sistance made available under this section to each com-
mercial insurer shall be equal to 90 percent of the amount
of the insured losses of the insurer as a result of the trig-
gering event involved.
(c) 
AGGREGATE
LIMITATION.—The 
aggregate
amount of financial assistance provided pursuant to this
section may not exceed $100,000,000,000.
(d) LIMITATIONS.—The appropriate Administrator
may establish such limitations as may be necessary to en-
sure that payments under this section in connection with
a triggering determination are made only to commercial
insurers that are not in default of any obligation under
section 7 to pay assessments or under section 8 to collect
surcharges.
(e) REPAYMENT.—Financial assistance made avail-
able under this section shall be repaid through assess-
ments under section 7 collected by the appropriate Admin-
istrator and surcharges remitted to the appropriate Ad-
ministrator under section 8. Any such amounts collected
or remitted shall be deposited into the general fund of the
Treasury.
(f) 
EMERGENCY
DESIGNATION.—Congress 
des-
ignates the amount of new budget authority and outlays
in all fiscal years resulting from this section as an emer-
gency requirement pursuant to section 252(e) of the Bal-
anced Budget and Emergency Deficit Control Act of 1985
(2 U.S.C. 901(e)). Such amount shall be available only
to the extent that a request, that includes designation of
such amount as an emergency requirement as defined in
such Act, is transmitted by the President to Congress.
SEC. 7. ASSESSMENTS.
(a) IN GENERAL.—In the case of a triggering deter-
mination, each commercial insurer shall be subject to as-
sessments under this section for the purpose of repaying
financial assistance made available under section 6 in con-
nection with such determination.
(b) AGGREGATE ASSESSMENT.—Pursuant to a trig-
gering determination, the appropriate Administrator shall
determine the aggregate amount to be assessed among all
commercial insurers, which shall be equal to 90 percent
of the lesser of—
(1) the amount of industry-wide losses resulting
from the triggering event involved; and
(2) $20,000,000,000.
(c) ALLOCATION OF ASSESSMENT.—
(1) IN
GENERAL.—The appropriate Adminis-
trator shall allocate the aggregate assessment
amount determined under subsection (b) among all
commercial insurers. The portion of the aggregate
assessment amount that is allocated as an assess-
ment on each commercial insurer shall be based on
the percentage, written by that insurer, of the aggre-
gate written premium, for all commercial insurers,
for the calendar year preceding the assessment.
(2) PAYMENT REQUIREMENT.—Upon notifica-
tion by the appropriate Administrator of an assess-
ment under this section, each commercial insurer
shall be required to pay to the appropriate Adminis-
trator, in the manner provided under section 9 by
the appropriate Administrator, the amount equal to
the assessment on such commercial insurer (subject
to the limitation under paragraph (3)).
(3) ANNUAL
LIMITATION
ON
AMOUNT
ALLO-
CATED TO EACH COMMERCIAL INSURER.—
(A) IN
GENERAL.—Of any assessments
under this section on a commercial insurer, the
portion required to be paid by any commercial
insurer during a calendar year shall not exceed
the amount that is equal to 3 percent of the ag-
gregate written premium for such insurer for
the preceding calendar year.
(B) 
MULTIPLE
PAYMENTS.—If 
any
amounts required to be repaid under this sec-
tion for a calendar year are limited by operation
of subparagraph (A), the appropriate Adminis-
trator shall provide that all such remaining
amounts shall be reallocated among all commer-
cial insurers (in the manner provided in para-
graph (1)) over such immediately succeeding
calendar years, and repaid over such years, as
may be necessary to provide for full payment of
such remaining amounts, except that the limita-
tion under subparagraph (A) shall apply to the
amounts paid in any such successive calendar
years.
(C) ADMINISTRATIVE FLEXIBILITY.—
(i) TIMING
OF
ASSESSMENTS.—As-
sessments under this section in connection
with a triggering demonstration shall be
made, to the extent that the appropriate
Administrator considers practicable and
appropriate, at the beginning of the cal-
endar year immediately following the trig-
gering determination.
(ii) ESTIMATES AND CORRECTIONS.—
If the appropriate Administrator makes an
assessment at a time other than provided
under clause (i), the appropriate Adminis-
trator may—
(I) require commercial insurers
to estimate their aggregate written
premiums for the year in which the
assessment is made; and
(II) make a subsequent refund or
require additional payments to correct
such estimation at the end of the cal-
endar year.
(4) DEFERRAL OF CONTRIBUTIONS.—The ap-
propriate Administrator may defer the payment of
part or all of the assessment required under para-
graph (2) to be paid by a commercial insurer, but
only to the extent that the appropriate Adminis-
trator determines that such deferral is necessary to
avoid the likely insolvency of the commercial insurer.
SEC. 8. TERRORISM LOSS REPAYMENT SURCHARGE.
(a) IMPOSITION AND COLLECTION.—If, pursuant to
a triggering determination, the appropriate Administrator
determines that the aggregate amount of industry-wide
losses resulting from the triggering event involved exceeds
$20,000,000,000, the appropriate Administrator shall—
(1) establish and impose a policyholder pre-
mium surcharge, as provided under this section, on
commercial property and casualty insurance written
after such determination, for the purpose of repay-
ing financial assistance made available under section
6 in connection with such triggering determination;
and
(2) provide for commercial insurers to collect
such surcharge and remit amounts collected to the
appropriate Administrator.
(b) AMOUNT AND DURATION.—The surcharge under
this section shall be established in such amount, and shall
apply to commercial property and casualty insurance writ-
ten during such period, as the appropriate Administrator
determines is necessary to recover the aggregate amount
of financial assistance provided under section 6 to cover
insured losses resulting from the triggering event that ex-
ceed $20,000,000,000.
(c) OTHER TERMS.—The surcharge under this sec-
tion shall—
(1) be based on a percentage of the amount of
commercial property and casualty insurance cov-
erage that a policy provides; and
(2) be imposed with respect to all commercial
property and casualty insurance coverage written
during the period referred to in subsection (b).
SEC. 9. ADMINISTRATION OF ASSESSMENTS AND SUR-
CHARGES.
(a) MANNER AND METHOD.—The appropriate Ad-
ministrator shall provide for the manner and method of
carrying out assessments under section 7 and surcharges
under section 8, including the timing and procedures of
making assessments and surcharges, notifying commercial
insurers of assessments or surcharge requirements, col-
lecting payments from and surcharges through commercial
insurers, and refunding of any excess amounts paid or
crediting such amounts against future assessments.
(b) TIMING OF COVERAGES AND ASSESSMENTS.—
The appropriate Administrator may adjust the timing of
coverages and assessments provided under this Act to pro-
vide for equivalent application of the provisions of this Act
to commercial insurers and policies that are not based on
a calendar year.
(c) APPLICATION
TO SELF-INSURANCE ARRANGE-
MENTS.—The appropriate Administrator may, in con-
sultation with the NAIC, apply the provisions of this Act,
as appropriate, to self-insurance arrangements by munici-
palities and other entities, but only if such application is
determined before the occurrence of a triggering event and
all of the provisions of this Act are applied uniformly to
such entities.
(d) ADJUSTMENT.—The appropriate Administrator
may adjust the assessments charged under section 7 or
the percentage imposed under the surcharge under section
8 at any time, as the appropriate Administrator considers
appropriate to protect the national interest, which may in-
clude avoiding unreasonable economic disruption or exces-
sive market instability.
SEC. 10. RESERVE FOR TERRORISM COVERAGE UNDER
COMMERCIAL LINES OF BUSINESS.
(a) IN GENERAL.—Section 832 of the Internal Rev-
enue Code of 1986 (relating to insurance company taxable
income) is amended by adding at the end the following
new subsection:
‘‘(h) TERRORISM RESERVE FOR COMMERCIAL LINES
OF BUSINESS.—In the case of an insurance company sub-
ject to tax under section 831(a)—
‘‘(1) INCLUSION FOR DECREASES, AND DEDUC-
TION FOR INCREASES, IN BALANCE OF RESERVE.—