ible for each covered line of insurance for 
the preceding calendar year plus an addi-
tional percentage, as follows— 
‘‘(I) for workers’ compensation in-
surance, 2.0 percent; 
‘‘(II) for group life insurance, 2.5 
percent; 
‘‘(III) for property insurance, 2.5 
percent; and 
‘‘(IV) for casualty insurance, 5.0 
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 that year, multiplied by the 
NBCR terrorism deductible for the pre-
ceding year for that covered line of insur-
ance plus the following additional percent-
ages, all of which shall be treated as 
subdeductibles that apply in lieu of the 
deductibles listed in clause (i) for NBCR 
terrorism insured losses— 
‘‘(I) for workers’ compensation in-
surance, 0.75 percent;
‘‘(II) for group life insurance, 
0.75 percent; 
‘‘(III) for property insurance, 
0.75 percent; and 
‘‘(IV) for casualty insurance, 0.75 
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; 
‘‘(G) notwithstanding subparagraphs (A) 
through (F), for the Transition Period and any 
other Program Year or other calendar year, if an 
insurer has not had a full year of operations 
during the calendar year immediately preceding 
such Period or year, such portion of the direct 
earned premiums of the insurer as the Secretary 
determines appropriate, subject to appropriate 
methodologies established by the Secretary for 
measuring such direct earned premiums; and 
‘‘(H) if, in any calendar year, aggregate in-
dustry insured losses exceed $1,000,000,000, the
insurer deductibles for the next calendar year 
shall be reduced by 0.1 percent for each 
$1,000,000,000 in insured losses that have oc-
curred during the preceding calendar year, ex-
cept that no insurer deductible shall be reduced 
below 5 percent. 
‘‘(13) NAIC.—The term ‘NAIC’ means the Na-
tional Association of Insurance Commissioners. 
‘‘(14) OWNERSHIP.—An insurer ‘owns’ another 
insurer if the insurer, directly or indirectly or acting 
through one or more other persons, owns 25 percent 
or more of any class of voting securities of the other 
insurer. 
‘‘(15) NBCR TERRORISM.—The term ‘NBCR ter-
rorism’ means an act of terrorism involving nuclear, 
biological, chemical, or radioactive reactions, releases, 
or contaminations, to the extent any insured losses 
are caused by any such reactions, releases, or con-
taminations. 
‘‘(16) PERSON.—The term ‘person’ means any 
individual, business or nonprofit entity (including 
those organized in the form of a partnership, limited 
liability company, corporation, or association), trust 
or estate, or a State or political subdivision of a State 
or other governmental unit.
‘‘(17) PROGRAM.—The term ‘Program’ means the 
Terrorism Insurance Program established by this 
title. 
‘‘(18) PROGRAM YEARS.— 
‘‘(A) 
TRANSITION
PERIOD.—The 
term 
‘Transition Period’ means the period beginning 
on the date of enactment of this Act and ending 
on December 31, 2002. 
‘‘(B) PROGRAM
YEAR
1.—The term ‘Pro-
gram Year 1’ means the period beginning on 
January 1, 2003 and ending on December 31, 
2003. 
‘‘(C) PROGRAM
YEAR
2.—The term ‘Pro-
gram Year 2’ means the period beginning on 
January 1, 2004 and ending on December 31, 
2004. 
‘‘(D) PROGRAM
YEAR
3.—The term ‘Pro-
gram Year 3’ means the period beginning on 
January 1, 2005 and ending on December 31, 
2005. 
‘‘(E) PROGRAM
YEAR
4.—The term ‘Pro-
gram Year 4’ means the period beginning on 
January 1, 2006 and ending on December 31, 
2006.
‘‘(F) ADDITIONAL
PROGRAM
YEARS.—The 
term ‘Additional Program Year’ means any ad-
ditional one-year period after Program Year 4 
during which the Program is in effect, which pe-
riod shall begin on January 1 and end on De-
cember 31 of the same calendar year. 
‘‘(19) PROPERTY INSURANCE.—The term ‘prop-
erty insurance’ means— 
‘‘(A) except as provided in subparagraph 
(B), insurance on real or personal property of 
every kind, including excess insurance, against 
loss or damage from any and all hazard or cause 
and against loss consequential upon such loss or 
damage, including business interruption insur-
ance, other than non-contractual legal liability 
for such loss or damage; and 
‘‘(B) does not include any type of commer-
cial automobile or workers’ compensation insur-
ance. 
‘‘(20) QUALIFIED
RISK
MANAGER.—The term 
‘qualified risk manager’ means any person who meets 
all of the following criteria: 
‘‘(A) The person is an employee of, or third 
party consultant retained by, the commercial 
policyholder.
‘‘(B) The person provides skilled services in 
loss prevention, loss reduction, or risk and insur-
ance coverage analysis, and purchase of insur-
ance. 
‘‘(C) The person possesses at least 1 of the 
following credentials: 
‘‘(i) A bachelor’s or higher degree in 
risk management issued by an accredited 
college or university. 
‘‘(ii) A designation as a Chartered 
Property and Casualty Underwriter (in this 
subparagraph referred to as ‘CPCU’) issued 
by the American Institute for CPCU/Insur-
ance Institute of America. 
‘‘(iii) A designation as an Associate in 
Risk Management (ARM) issued by Amer-
ican Institute for CPCU/Insurance Institute 
of America. 
‘‘(iv) A designation as a Certified Risk 
Manager (CRM) issued by the National Al-
liance for Insurance Education & Research. 
‘‘(v) A designation as a RIMS Fellow 
(RS) issued by the Global Risk Management 
Institute.
‘‘(vi) At least 5 years of experience in 
1 or more of the following areas of commer-
cial property insurance or commercial cas-
ualty insurance: 
‘‘(I) Risk financing. 
‘‘(II) Claims administration. 
‘‘(III) Loss prevention. 
‘‘(IV) Risk and insurance cov-
erage analysis. 
‘‘(21) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Treasury. 
‘‘(22) STATE.—The term ‘State’ means any 
State of the United States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Commonwealth 
of the Northern Mariana Islands, American Samoa, 
Guam, each of the United States Virgin Islands, and 
any territory or possession of the United States. 
‘‘(23) UNITED
STATES.—The term ‘United 
States’ means the several States, and includes the ter-
ritorial sea and the continental shelf of the United 
States, as those terms are defined in the Violent 
Crime Control and Law Enforcement Act of 1994 (18 
U.S.C. 2280, 2281). 
‘‘(24) WORKERS’ 
COMPENSATION.—The term 
‘workers’ compensation’ means insurance against loss
from liability imposed by law upon employers to 
compensate employees and their dependents for injury 
sustained by the employees arising out of and in the 
course of the employment, irrespective of negligence or 
of the fault of either party. 
‘‘(25) RULE OF CONSTRUCTION FOR DATES.— 
With respect to any reference to a date in this title, 
such day shall be construed— 
‘‘(A) to begin at 12:01 a.m. on that date; 
and 
‘‘(B) to end at midnight on that date. 
‘‘SEC. 103. TERRORISM INSURANCE PROGRAM. 
‘‘(a) ESTABLISHMENT OF PROGRAM.— 
‘‘(1) IN GENERAL.—There is established in the 
Department of the Treasury the Terrorism Insurance 
Program. 
‘‘(2) AUTHORITY OF THE SECRETARY.—Notwith-
standing any other provision of State or Federal law, 
the Secretary shall administer the Program, and shall 
pay the Federal share of compensation for insured 
losses in accordance with subsection (e). 
‘‘(3) MANDATORY PARTICIPATION.—Each entity 
that meets the definition of an insurer under this title 
shall participate in the Program.
‘‘(b) CONDITIONS FOR FEDERAL PAYMENTS.—No pay-
ment may be made by the Secretary under this section with 
respect to an insured loss that is covered by an insurer, 
unless— 
‘‘(1) the person that suffers the insured loss, or 
a person acting on behalf of that person, files a claim 
with the insurer; 
‘‘(2) the insurer provides clear and conspicuous 
disclosure to the policyholder of the premium charged 
for insured losses covered by the program and the 
Federal share of compensation for insured losses 
under the Program— 
‘‘(A) in the case of any policy that is issued 
before the date of enactment of this Act, not later 
than 90 days after that date of enactment; 
‘‘(B) in the case of any policy that is issued 
within 90 days of the date of enactment of this 
Act, at the time of offer, purchase, and renewal 
of the policy; and 
‘‘(C) in the case of any policy that is issued 
more than 90 days after the date of enactment 
of this Act, on a separate line item in the policy, 
at the time of offer, purchase, and renewal of the 
policy;
‘‘(3) the insurer processes the claim for the in-
sured loss in accordance with appropriate business 
practices, and any reasonable procedures that the Sec-
retary may prescribe; and 
‘‘(4) the insurer submits to the Secretary, in ac-
cordance with such reasonable procedures as the Sec-
retary may establish— 
‘‘(A) a claim for payment of the Federal 
share of compensation for insured losses under 
the Program; 
‘‘(B) written certification— 
‘‘(i) of the underlying claim; and 
‘‘(ii) of all payments made for insured 
losses; and 
‘‘(C) certification of its compliance with the 
provisions of this subsection. 
‘‘(c) MANDATORY AVAILABILITY.—Each entity that 
meets the definition of an insurer under section 102— 
‘‘(1) shall make available, in all of its covered 
lines of insurance policies, coverage for insured losses 
that does not differ materially from the terms, 
amounts, and other coverage limitations applicable to 
losses arising from events other than acts of terrorism; 
‘‘(2) shall make available, in any of its covered 
lines of insurance policies that exclude coverage for