clared by the Congress, except that this clause 
shall not apply with respect to any coverage for 
workers’ compensation or group life insurance. 
‘‘(C) DETERMINATIONS FINAL.—Any certifi-
cation of, or determination not to certify, an act 
as an act of terrorism under this paragraph 
shall be final, and shall not be subject to judicial 
review. 
‘‘(D) NONDELEGATION.—The Secretary may 
not delegate or designate to any other officer, em-
ployee, or person, any determination under this 
paragraph of whether, during the effective period 
of the Program, an act of terrorism has occurred. 
‘‘(2) AFFILIATE.—The term ‘affiliate’ means, 
with respect to an insurer, any insurer that owns, is 
owned by, or is under common ownership with an-
other insurer. 
‘‘(3) CASUALTY INSURANCE.—The term ‘casualty 
insurance’ means— 
‘‘(A) insurance, including excess insurance 
and surety insurance, against legal liability for 
losses caused by the death, injury, or disability 
of any person or for damage to property, with 
provision for medical, hospital and surgical ben-
efits to the injured persons; and
‘‘(B) for the purposes of this Act, does not 
include any type of commercial automobile or 
workers’ compensation insurance. 
‘‘(4) COVERED LINE OF INSURANCE.—The term 
‘covered line of insurance’ means— 
‘‘(A) commercial property insurance, com-
mercial casualty insurance, workers’ compensa-
tion insurance and group life insurance; and 
‘‘(B) does not include— 
‘‘(i) Federal crop insurance issued or 
reinsured under the Federal Crop Insurance 
Act (7 U.S.C. 1501 et seq.), or any other 
type of crop or livestock insurance that is 
privately issued or reinsured; 
‘‘(ii) private mortgage insurance (as 
that term is defined in section 2 of the 
Homeowners Protection Act of 1998 (12 
U.S.C. 4901)) or title insurance; 
‘‘(iii) financial guaranty insurance 
issued by monoline financial guaranty in-
surance corporations; 
‘‘(iv) insurance for medical mal-
practice; 
‘‘(v) health or life insurance, except 
group life insurance;
‘‘(vi) flood insurance provided under 
the National Flood Insurance Act of 1968 
(42 U.S.C. 4001 et seq.); 
‘‘(vii) reinsurance or retrocessional re-
insurance; or 
‘‘(viii) commercial automobile insur-
ance. 
‘‘(5) DIRECT EARNED PREMIUM.—The term ‘di-
rect earned premium’ means a direct earned premium 
for commercial property, commercial casualty, work-
ers’ compensation, or group life insurance issued by 
any insurer for insurance against losses occurring at 
the locations described in subparagraphs (A) and (B) 
of paragraph (10). 
‘‘(6) EXEMPT
COMMERCIAL
PURCHASER.—The 
term ‘exempt commercial purchaser’ means any per-
son purchasing commercial insurance that meets the 
following requirements: 
‘‘(A) The person employs or retains a quali-
fied risk manager to negotiate insurance cov-
erage. 
‘‘(B) The person meets at least two of the 
following criteria: 
‘‘(i) The person possesses a net worth 
in excess of $20,000,000.
‘‘(ii) The person generates annual reve-
nues in excess of $50,000,000. 
‘‘(iii) The person employs more than 
500 full time or full time equivalent em-
ployees per individual insured or is a mem-
ber of affiliated group employing more than 
1,000 employees in the aggregate. 
‘‘(iv) The person pays annual aggre-
gate nationwide insurance premiums in ex-
cess of $100,000 for covered lines of insur-
ance. 
‘‘(v) The person is a not-for-profit or-
ganization or public entity generating an-
nual budgeted expenditures of at least 
$30,000,000. 
‘‘(vi) The person is a municipality 
with a population in excess of 50,000 per-
sons. 
‘‘(7) EXEMPT COMMERCIAL PURCHASER CERTIFI-
CATION.—The term ‘exempt commercial purchaser 
certification’ means a written certification that the 
insurer offering a policy to an exempt commercial 
purchaser has obtained, at least within the previous 
12 months, a certification signed by the qualified risk 
manager, the chief executive officer, or the chief finan-
cial officer of the exempt commercial purchaser, certi-
fying with respect to the insurance to which the re-
quirements of section 103(c)(1) apply to that insurer 
that— 
‘‘(A) the purchaser has an employee that 
meets the definition of a qualified risk manager 
under this section; 
‘‘(B) the purchaser meets the definition of 
an exempt commercial purchaser in accordance 
with this section; 
‘‘(C) the purchaser is aware that the policy 
being considered for purchase contains forms and 
rates that are not subject to State regulatory re-
view or approval; 
‘‘(D) the purchaser has or has retained the 
necessary expertise to negotiate its own policy 
language and rates; and 
‘‘(E) the purchaser agrees to the use of ex-
empted rates and forms by its insurer or insur-
ers. 
‘‘(8) GROUP LIFE INSURANCE.—The term ‘group 
life insurance’ means an insurance contract that pro-
vides term life insurance coverage, accidental death 
coverage, or a combination thereof, for a number of 
individuals under a single contract, on the basis of a
group selection of risks, but does not include ‘Cor-
porate Owned Life Insurance’ or ‘Business Owned 
Life Insurance,’ each as defined under the Internal 
Revenue Code of 1986, or any similar product. 
‘‘(9) HOME
STATE.—The term ‘home State’ 
means as follows: 
‘‘(A) In the case of a policy written for com-
mercial risks that are primarily located in a 
State, such term means such State. 
‘‘(B) If subparagraph (A) does not apply, 
such term means the State where the commercial 
policyholder has its principal place of business 
(such as where the policyholder’s headquarters 
are located, as determined by the predominant 
physical location in the United States of the offi-
cers and senior management of the policyholder). 
‘‘(10) INSURED LOSS.—The term ‘insured loss’ 
means any loss resulting from an act of terrorism (in-
cluding an act of war, in the case of workers’ com-
pensation and group life insurance) that is covered by 
primary or excess property, casualty, workers’ com-
pensation, or group life insurance issued by an in-
surer if such loss— 
‘‘(A) occurs within the United States; or
‘‘(B) occurs to an air carrier (as defined in 
section 40102 of title 49, United States Code), to 
a United States flag vessel (or a vessel based 
principally in the United States, on which 
United States income tax is paid and whose in-
surance coverage is subject to regulation in the 
United States), regardless of where the loss oc-
curs, or at the premises of any United States 
mission. 
‘‘(11) INSURER.—The term ‘insurer’ means any 
entity, including any affiliate thereof— 
‘‘(A) that is— 
‘‘(i) licensed or admitted to engage in 
the business of providing primary or excess 
insurance in any State; 
‘‘(ii) not licensed or admitted as de-
scribed in clause (i), if it is an eligible sur-
plus line carrier listed on the Quarterly 
Listing of Alien Insurers of the NAIC, or 
any successor thereto; 
‘‘(iii) approved for the purpose of offer-
ing a covered line of insurance by a Federal 
agency in connection with maritime, en-
ergy, or aviation activity;
‘‘(iv) a State residual market insur-
ance entity or State workers’ compensation 
fund; or 
‘‘(v) any other entity described in sec-
tion 103(f), to the extent provided in the 
rules of the Secretary issued under section 
103(f); 
‘‘(B) that receives direct earned premiums 
for any type of covered line of insurance cov-
erage, other than in the case of entities described 
in subsections (d) and (f) of section 103; and 
‘‘(C) that meets any other criteria that the 
Secretary may reasonably prescribe. 
‘‘(12) INSURER DEDUCTIBLE.—The term ‘insurer 
deductible’ means— 
‘‘(A) for the Transition Period, the value of 
an insurer’s direct earned premiums over the 
calendar year immediately preceding the date of 
enactment of this Act, multiplied by 1 percent; 
‘‘(B) for Program Year 1, the value of an 
insurer’s direct earned premiums over the cal-
endar year immediately preceding Program Year 
1, multiplied by 7 percent; 
‘‘(C) for Program Year 2, the value of an 
insurer’s direct earned premiums over the cal-
endar year immediately preceding Program Year 
2, multiplied by 10 percent; 
‘‘(D) for Program Year 3, the value of an 
insurer’s direct earned premiums over the cal-
endar year immediately preceding Program Year 
3, multiplied by 15 percent; 
‘‘(E) for Program Year 4— 
‘‘(i) except as provided in clause (ii), 
the value of an insurer’s direct earned pre-
mium for a covered line of insurance over 
the calendar year immediately preceding 
Program Year 4, multiplied by— 
‘‘(I) for workers’ compensation in-
surance, 16 percent; 
‘‘(II) for group life insurance, 
21.5 percent; 
‘‘(III) for property insurance, 20 
percent; and 
‘‘(IV) for casualty insurance, 25 
percent; and 
‘‘(ii) with respect to NBCR terrorism 
coverage, the value of an insurer’s direct 
earned premium for a covered line of insur-
ance over the calendar year immediately 
preceding Program Year 4, multiplied by
the following percentages which shall be 
treated as sub-deductibles that apply in lieu 
of the deductibles set forth in clause (i) for 
NBCR terrorism losses— 
‘‘(I) for workers’ compensation in-
surance, 7.5 percent; 
‘‘(II) for group life insurance, 7.5 
percent; 
‘‘(III) for property insurance, 7.5 
percent; and 
‘‘(IV) for casualty insurance, 7.5 
percent; and 
‘‘(iii) if, for any covered line of insur-
ance, an insurer incurs insured losses 
caused by NBCR terrorism, such NBCR in-
sured losses shall be applied against both 
the deductible set forth in clause (i) and the 
NBCR terrorism deductible set forth in 
clause (ii) for that covered line of insurance; 
‘‘(F) for any Additional Program Years— 
‘‘(i) except as provided in clause (ii), 
the value of an insurer’s direct earned pre-
mium for a covered line of insurance over 
the calendar year immediately preceding 
that year, multiplied by the insurer deduct-