IIB 
110TH CONGRESS 
1ST SESSION H. R. 2761 
IN THE SENATE OF THE UNITED STATES 
SEPTEMBER 20, 2007 
Received; read twice and referred to the Committee on Banking, Housing, and 
Urban Affairs 
AN ACT 
To extend the Terrorism Insurance Program of the 
Department of the Treasury, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Terrorism Risk Insur-
ance Revision and Extension Act of 2007’’. 
SEC. 2. TERMINATION OF PROGRAM. 
Subsection (a) of section 108 of the Terrorism Risk 
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended 
by striking ‘‘December 31, 2007’’ and inserting ‘‘Decem-
ber 31, 2022’’. 
SEC. 3. REVISION OF TERRORISM INSURANCE PROGRAM. 
(a) IN GENERAL.—The Terrorism Risk Insurance 
Act of 2002 is amended— 
(1) by striking sections 101, 102, and 103 and 
inserting the following new sections: 
‘‘SEC. 101. CONGRESSIONAL FINDINGS AND PURPOSE. 
‘‘(a) FINDINGS.—The Congress finds that— 
‘‘(1) the ability of businesses and individuals to 
obtain property and casualty insurance at reasonable 
and predictable prices, in order to spread the risk of 
both routine and catastrophic loss, is critical to eco-
nomic growth, urban development, and the construc-
tion and maintenance of public and private housing, 
as well as to the promotion of United States exports 
and foreign trade in an increasingly interconnected 
world; 
‘‘(2) property and casualty insurance firms are 
important financial institutions, the products of 
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which allow mutualization of risk and the efficient 
use of financial resources and enhance the ability of 
the economy to maintain stability, while responding 
to a variety of economic, political, environmental, 
and other risks with a minimum of disruption; 
‘‘(3) the ability of the insurance industry to 
cover the unprecedented financial risks presented by 
potential acts of terrorism in the United States can 
be a major factor in the recovery from terrorist at-
tacks, while maintaining the stability of the econ-
omy; 
‘‘(4) widespread financial market uncertainties 
have arisen following the terrorist attacks of Sep-
tember 11, 2001, including the absence of informa-
tion from which financial institutions can make sta-
tistically valid estimates of the probability and cost 
of future terrorist events, and therefore the size, 
funding, and allocation of the risk of loss caused by 
such acts of terrorism; 
‘‘(5) a decision by property and casualty insur-
ers to deal with such uncertainties, either by termi-
nating property and casualty coverage for losses 
arising from terrorist events, or by radically esca-
lating premium coverage to compensate for risks of 
loss that are not readily predictable, could seriously 
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hamper ongoing and planned construction, property 
acquisition, and other business projects, generate a 
dramatic increase in rents, and otherwise suppress 
economic activity; 
‘‘(6) the United States Government should co-
ordinate with insurers to provide financial com-
pensation to insured parties for losses from acts of 
terrorism, contributing to the stabilization of the 
United States economy in a time of national crisis, 
and periodically assess the ability of the financial 
services industry to develop the systems, mecha-
nisms, products, and programs necessary to create a 
viable financial services market for private terrorism 
risk insurance that will lessen the financial partici-
pation of the United States Government; 
‘‘(7) in addition to a terrorist attack on the 
United States using conventional means or weapons, 
there is and continues to be a potential threat of a 
terrorist attack involving the use of unconventional 
means or weapons, such as nuclear, biological, chem-
ical, or radiological agents; 
‘‘(8) as nuclear, biological, chemical, or radio-
logical acts of terrorism (known as NBCR terrorism) 
present a threat of loss of life, injury, disease, and 
property damage potentially unparalleled in scope 
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and complexity by any prior event, natural or man- 
made, the Federal Government’s responsibility in 
providing for and preserving national economic secu-
rity calls for a strong Federal role in ensuring finan-
cial compensation and economic recovery in the 
event of such an attack; 
‘‘(9) a report issued by the Government Ac-
countability Office in September 2006 concluded 
that ‘any purely market-driven expansion of cov-
erage’ for NBCR terrorism risk is ‘highly unlikely in 
the foreseeable future’, and the September 2006 re-
port from the President’s Working Group on Finan-
cial Markets concluded that reinsurance for NBCR 
terrorist events is virtually unavailable and that 
‘[g]iven the general reluctance of insurance compa-
nies to provide coverage for these types of risks, 
there may be little potential for future market devel-
opment’; 
‘‘(10) group life insurance companies are im-
portant financial institutions whose products make 
life insurance coverage affordable for millions of 
Americans and often serve as their only life insur-
ance benefit; 
‘‘(11) the group life insurance industry, in the 
event of a severe act of terrorism, is vulnerable to 
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insolvency because high concentrations of covered 
employees work in the same locations, because pri-
mary group life insurers do not exclude conventional 
and NBCR terrorism risks while most catastrophic 
reinsurance does exclude such terrorism risks, and 
because a large-scale loss of life would fall outside 
of actuarial expectations of death; and 
‘‘(12) the United States Government should 
provide temporary financial compensation to insured 
parties, contributing to the stabilization of the 
United States economy in a time of national crisis, 
while the financial services industry develops the sys-
tems, mechanisms, products, and programs nec-
essary to create a viable financial services market for 
private terrorism risk insurance. 
‘‘(b) PURPOSE.—The purpose of this title is to estab-
lish a temporary Federal program that provides for a 
transparent system of shared public and private com-
pensation for insured losses resulting from acts of ter-
rorism, in order to— 
‘‘(1) protect consumers by addressing market 
disruptions and ensure the continued widespread 
availability and affordability of property and cas-
ualty insurance and group life insurance for all types 
of terrorism risk, including conventional terrorism 
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risk and nuclear, biological, chemical, and radio-
logical terrorism risk; 
‘‘(2) allow for a transitional period for the pri-
vate markets to stabilize, resume pricing of such in-
surance, and build capacity to absorb any future 
losses, while preserving State insurance regulation 
and consumer protections (unless otherwise pre-
empted by this Act); and 
‘‘(3) provide finite liability limits for terrorism 
insurance losses for insurers and the United States 
Government. 
‘‘SEC. 102. DEFINITIONS. 
‘‘In this title, the following definitions shall apply: 
‘‘(1) ACT OF TERRORISM.— 
‘‘(A) CERTIFICATION.—The term ‘act of 
terrorism’ means any act that is certified by the 
Secretary, in concurrence with the Secretary of 
State, the Secretary of Homeland Security, and 
the Attorney General of the United States— 
‘‘(i) to be an act of terrorism; 
‘‘(ii) to be a violent act or an act that 
is dangerous to— 
‘‘(I) human life; 
‘‘(II) property; or 
‘‘(III) infrastructure; 
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‘‘(iii) to have resulted in damage with-
in the United States, or outside of the 
United States in the case of— 
‘‘(I) an air carrier or vessel de-
scribed in paragraph (9)(B); or 
‘‘(II) the premises of a United 
States mission; and 
‘‘(iv) to have been committed by an 
individual or individuals as part of an ef-
fort to coerce the civilian population of the 
United States or to influence the policy or 
affect the conduct of the United States 
Government by coercion. 
‘‘(B) LIMITATION.—No act shall be cer-
tified by the Secretary as an act of terrorism 
if— 
‘‘(i) the act is committed as part of 
the course of a war declared by the Con-
gress, except that this clause shall not 
apply with respect to any coverage for 
workers’ compensation; or 
‘‘(ii) property and casualty insurance 
and group life insurance losses resulting 
from the act, in the aggregate, do not ex-
ceed $5,000,000. 
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‘‘(C) CERTIFICATION
OF
ACT
OF
NBCR 
TERRORISM.—Where a certified act of terrorism 
is carried out by means of a nuclear, biological, 
chemical, or radiological weapon or similar in-
strumentality, the Secretary shall further cer-
tify such act of terrorism as an act of NBCR 
terrorism. If a certified act of terrorism involves 
any other weapon or instrumentality, the Sec-
retary, in concurrence with the Secretary of 
State, the Secretary of Homeland Security, and 
the Attorney General of the United States, shall 
determine whether the act of terrorism meets 
the definition of NBCR terrorism in this sec-
tion. If such determination is that the act does 
meet such definition, the Secretary shall further 
certify that such act as an act of NBCR ter-
rorism. Nothing in this subparagraph shall pro-
hibit the Secretary from determining that a sin-
gle act of terrorism resulted in both NBCR and 
non-NBCR insured losses. 
‘‘(D) DETERMINATIONS FINAL.—Any cer-
tification of, or determination not to certify, an 
act as an act of terrorism or as an act of 
NBCR terrorism under this paragraph shall be 
final, and shall not be subject to judicial review. 
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‘‘(E) NONDELEGATION.—The Secretary 
may not delegate or designate to any other offi-
cer, employee, or person, any determination 
under this paragraph of whether, during the ef-
fective period of the Program, an act of ter-
rorism, including an act of NBCR terrorism, 
has occurred. 
‘‘(F) COMPENSATION
SUBJECT
TO
FUR-
THER
CONGRESSIONAL
ACTION.—Notwith-
standing any certification of an act under this 
paragraph as an act of terrorism or an act of 
NBCR terrorism, Federal compensation under 
the Program shall be subject to the provisions 
of section 103(h). 
‘‘(G) 
SUBMISSION
OF
CERTIFICATION 
UNDER
THIS
PARAGRAPH.—Upon any certifi-
cation under subparagraph (A), the Secretary 
shall submit such certification to the Congress. 
‘‘(2) AFFILIATE.—The term ‘affiliate’ means, 
with respect to an insurer, any entity that controls, 
is controlled by, or is under common control with the 
insurer. 
‘‘(3) AMOUNT AT RISK.—The term ‘amount at 
risk’ means face amount less statutory policy re-
serves for group life insurance issued by any insurer 
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for insurance against losses occurring at the loca-
tions described in subparagraph (A) of paragraph 
(9). 
‘‘(4) CONTROL.—An entity has ‘control’ over 
another entity, if— 
‘‘(A) the entity directly or indirectly or act-
ing through 1 or more other persons owns, con-
trols, or has power to vote 25 percent or more 
of any class of voting securities of the other en-
tity; 
‘‘(B) the entity controls in any manner the 
election of a majority of the directors or trust-
ees of the other entity; or 
‘‘(C) the Secretary determines, after notice 
and opportunity for hearing, that the entity di-
rectly or indirectly exercises a controlling influ-
ence over the management or policies of the 
other entity; except that for purposes of any 
proceeding under this subparagraph, there shall 
be a presumption that any entity which directly 
or indirectly owns, controls, or has power to 
vote less than 5 percent of any class of voting 
securities of another entity does not have con-
trol over that entity. 
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‘‘(5) COVERED
LINES.—The term ‘covered 
lines’ means property and casualty insurance and 
group life insurance, as defined in this section. 
‘‘(6) DIRECT EARNED PREMIUM.—The term ‘di-
rect earned premium’ means a direct earned pre-
mium for property and casualty insurance issued by 
any insurer for insurance against losses occurring at 
the locations described in subparagraph (A) of para-
graph (9). 
‘‘(7) EXCESS INSURED LOSS.—The term ‘excess 
insured loss’ means, with respect to a Program 
Year, any portion of the amount of insured losses 
during such Program Year that exceeds the cap on 
annual liability under section 103(e)(2)(A). 
‘‘(8) GROUP
LIFE
INSURANCE.—The term 
‘group life insurance’ means an insurance contract 
that provides life insurance coverage, including term 
life insurance coverage, universal life insurance cov-
erage, variable universal life insurance coverage, and 
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 ‘Corporate Owned Life Insurance’ or 
‘Business Owned Life Insurance,’ each as defined 
under the Internal Revenue Code of 1986, or any 
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similar product, or group life reinsurance or 
retrocessional reinsurance. 
‘‘(9) INSURED LOSS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘insured loss’ 
means any loss resulting from an act of ter-
rorism (including an act of war, in the case of 
workers’ compensation) that is covered by pri-
mary or excess property and casualty insurance, 
or group life insurance to the extent of the 
amount at risk, issued by an insurer, if such 
loss— 
‘‘(i) occurs within the United States; 
or 
‘‘(ii) occurs to an air carrier (as de-
fined in section 40102 of title 49, United 
States Code), to a United States flag ves-
sel (or a vessel based principally in the 
United States, on which United States in-
come tax is paid and whose insurance cov-
erage is subject to regulation in the United 
States), regardless of where the loss oc-
curs, or at the premises of any United 
States mission. 
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‘‘(B) LIMITATION FOR GROUP LIFE INSUR-
ANCE.—Such term shall not include any losses 
of an insurer resulting from coverage of any 
single certificate holder under any group life in-
surance coverages of the insurer to the extent 
such losses are not compensated under the Pro-
gram by reason of section 103(e)(1)(D). 
‘‘(10) 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, or group life 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 of-
fering property and casualty insurance by 
a Federal agency in connection with mari-
time, energy, or aviation activity; 
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‘‘(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 commercial property and cas-
ualty insurance coverage, or, in the case of 
group life insurance, that receives direct pre-
miums, other than in the case of entities de-
scribed in sections 103(d) and 103(f); and 
‘‘(C) that meets any other criteria that the 
Secretary may reasonably prescribe. 
‘‘(11) INSURER
DEDUCTIBLE.—The term ‘in-
surer 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; 
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‘‘(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, the value of an 
insurer’s direct earned premiums over the cal-
endar year immediately preceding Program 
Year 4, multiplied by 17.5 percent; 
‘‘(F) for Program Year 5, the value of an 
insurer’s direct earned premiums over the cal-
endar year immediately preceding Program 
Year 5, multiplied by 20 percent; 
‘‘(G) for each additional Program Year— 
‘‘(i) with respect to property and cas-
ualty insurance, the value of an insurer’s 
direct earned premiums over the calendar 
year immediately preceding such Program 
Year, multiplied by 20 percent; and 
‘‘(ii) with respect to group life insur-
ance, the value of an insurer’s amount at 
risk over the calendar year immediately 
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preceding such Program Year, multiplied 
by 0.0351 percent; 
‘‘(H) notwithstanding subparagraphs (A) 
through (G), for the Transition Period or any 
Program Year, if an insurer has not had a full 
year of operations during the calendar year im-
mediately preceding such Period or Program 
Year, such portion of the direct earned pre-
miums with respect to property and casualty in-
surance, and such portion of the amounts at 
risk with respect to group life insurance, of the 
insurer as the Secretary determines appro-
priate, subject to appropriate methodologies es-
tablished by the Secretary for measuring such 
direct earned premiums and amounts at risk; 
‘‘(I) notwithstanding subparagraphs (A) 
through (H) and (J), in the case of any act of 
NBCR terrorism, for any additional Program 
Year— 
‘‘(i) with respect to property and cas-
ualty insurance, the value of an insurer’s 
direct earned premiums over the calendar 
year immediately preceding such Program 
Year, multiplied by a percentage, which— 
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‘‘(I) for the second additional 
Program Year, shall be 3.5 percent; 
and 
‘‘(II) for each succeeding Pro-
gram Year thereafter, shall be 50 
basis points greater than the percent-
age applicable to the preceding addi-
tional Program Year; and 
‘‘(ii) with respect to group life insur-
ance, the value of an insurer’s amount at 
risk over the calendar year immediately 
preceding such Program Year, multiplied 
by a percentage, which— 
‘‘(I) for the first additional Pro-
gram Year, shall be 0.00614 percent; 
and 
‘‘(II) for each succeeding Pro-
gram Year thereafter, shall be 0.088 
basis point greater than the percent-
age applicable to the preceding addi-
tional Program Year; 
‘‘(J) notwithstanding subparagraph (G)(i), 
if aggregate industry insured losses resulting 
from a certified act of terrorism exceed 
$1,000,000,000, for any insurer that sustains 
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insured losses resulting from such act of ter-
rorism, the value of such insurer’s direct earned 
premiums over the calendar year immediately 
preceding the Program Year, multiplied by a 
percentage, which— 
‘‘(i) for the first additional Program 
Year shall be 5 percent; and 
‘‘(ii) for each additional Program 
Year thereafter, shall be 50 basis points 
greater than the percentage applicable to 
the preceding additional Program Year, ex-
cept that if an act of terrorism occurs dur-
ing any additional Program Year that re-
sults in aggregate industry insured losses 
exceeding $1,000,000,000, the percentage 
for the succeeding additional Program 
Year shall be 5 percent and the increase 
under this clause shall apply to additional 
Program Years thereafter; 
except that for purposes of determining under 
this subparagraph whether aggregate industry 
insured losses exceed $1,000,000,000, the Sec-
retary may combine insured losses resulting 
from two or more certified acts of terrorism oc-
curring during such Program Year in the same 
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geographic area (with such area determined by 
the Secretary), in which case such insurer shall 
be permitted to combine insured losses resulting 
from such acts of terrorism for purposes of sat-
isfying its insurer deductible under this sub-
paragraph; and except that the insurer deduct-
ible under this subparagraph shall apply only 
with respect to compensation of insured losses 
resulting from such certified act, or combined 
certified acts, and that for purposes of com-
pensation of any other insured losses occurring 
in the same Program Year, the insurer deduct-
ible determined under subparagraph (G)(i) or 
(I) shall apply; and 
‘‘(K) for the fifth additional Program Year 
and any Additional Program year thereafter, 
notwithstanding subparagraph (I)(i), if aggre-
gate industry insured losses resulting from a 
certified 
act 
of 
NBCR 
terrorism 
exceed 
$1,000,000,000, for any insurer that sustains 
insured losses resulting from such act of NBCR 
terrorism, the value of such insurer’s direct 
earned premiums over the calendar year imme-
diately preceding the Program Year, multiplied 
by a percentage, which— 
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‘‘(i) for the fifth additional Program 
Year shall be 5 percent; and 
‘‘(ii) for each additional Program 
Year thereafter, shall be 50 basis points 
greater than the percentage applicable to 
the preceding additional Program Year, ex-
cept that if an act of NBCR terrorism oc-
curs during the fifth additional Program 
Year or any additional Program Year 
thereafter that results in aggregate indus-
try 
insured 
losses 
exceeding 
$1,000,000,000, the percentage for the 
succeeding additional Program Year shall 
be 5 percent and the increase under this 
clause shall apply to additional Program 
Years thereafter; 
except that for purposes of determining under 
this subparagraph whether aggregate industry 
insured losses exceed $1,000,000,000, the Sec-
retary may combine insured losses resulting 
from two or more certified acts of NBCR ter-
rorism occurring during such Program Year in 
the same geographic area (with such area deter-
mined by the Secretary), in which case such in-
surer shall be permitted to combine insured 
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losses resulting from such acts of NBCR ter-
rorism for purposes of satisfying its insurer de-
ductible under this subparagraph; and except 
that the insurer deductible under this subpara-
graph shall apply only with respect to com-
pensation of insured losses resulting from such 
certified act, or combined certified acts, and 
that for purposes of compensation of any other 
insured losses occurring in the same Program 
Year, the insurer deductible determined under 
subparagraph (I)(i) shall apply. 
‘‘(12) NAIC.—The term ‘NAIC’ means the Na-
tional Association of Insurance Commissioners. 
‘‘(13) NBCR TERRORISM.—The term ‘NBCR 
terrorism’ means an act of terrorism that involves or 
triggers nuclear, biological, chemical, or radiological 
reactions, releases, or contaminations, but only if 
any aggregate industry insured losses that result 
from such reactions, releases, or contaminations ex-
ceed the amount set forth in paragraph (1)(B)(ii). 
‘‘(14) 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 
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or estate, or a State or political subdivision of a 
State or other governmental unit. 
‘‘(15) PROGRAM.—The term ‘Program’ means 
the Terrorism Insurance Program established by 
this title. 
‘‘(16) 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 
VerDate Aug 31 2005 
01:38 Sep 21, 2007
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