(6) in section 108(c)(1), by striking ‘‘paragraph 
(4), (5), (6), (7), or (8)’’ and inserting ‘‘paragraph 
(5), (6), (7), (8), or (9)’’. 
(b) REGULATIONS
ON CLAIMS ALLOCATIONS.—The 
Secretary of the Treasury shall issue the regulations referred 
to in subparagraph (C) of section 103(e)(2) of the Terrorism 
Risk Insurance Act of 2002, as amended by subsection 
(a)(1) of this section, and to carry out subparagraph (B) 
of such section 103(e)(2), not later than the expiration of 
the 120-day period beginning upon the date of the enact-
ment of this Act. 
(c) REGULATIONS ON NBCR EXEMPTIONS.—The Sec-
retary of the Treasury shall issue the regulations to carry 
out paragraph (4) of section 103(a) of the Terrorism Risk 
Insurance Act of 2002, as amended by subsection (a)(1) of 
this section, not later than the expiration of the 180-day 
period beginning upon the date of the enactment of this Act. 
SEC. 4. TERRORISM BUY-DOWN FUND. 
The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 
6701 note) is amended— 
(1) by inserting after section 106 the following 
new section: 
‘‘SEC. 106A. TERRORISM BUY-DOWN FUND. 
‘‘(a) ESTABLISHMENT.—The Secretary shall establish 
a Terrorism Buy-Down Fund (in this section referred to 
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as the ‘Fund’) that shall make available additional ter-
rorism coverage for the insured losses of insurers, which 
shall be available for purchase by insurers on a voluntary 
basis. 
‘‘(b) PURCHASE
OF DEDUCTIBLE, CO-SHARE, AND 
TRIGGER BUY-DOWN COVERAGE.— 
‘‘(1) IN GENERAL.—An insurer may purchase 
deductible, co-share, and pre-trigger buy-down cov-
erage (in this section referred to as ‘buy-down cov-
erage’) through the Fund by making an election, in 
advance, to treat some or all of the premiums it has 
disclosed pursuant to section 103(b)(2) as fee charges 
for the Program imposed by the Secretary and remit-
ting such amounts to the Fund. 
‘‘(2) LIMITS.—An insurer may not purchase 
buy-down coverage in an amount greater than the 
lesser of— 
‘‘(A) the highest amount specified in section 
103(e)(1)(C); and 
‘‘(B) the insurer’s one-in-one-hundred-year 
risk exposure to acts of terrorism. 
‘‘(c) BUY-DOWN COVERAGE.—The Fund shall provide 
the buy-down coverage to an insurer for losses for acts of 
terrorism, without application of the insurer deductible and 
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in addition to any otherwise payable Federal share of com-
pensation pursuant to section 103(e). 
‘‘(d) BUILD-UP.—The buy-down coverage that shall be 
payable to an insurer for qualifying losses shall be the ag-
gregate of the insurer’s buy-down coverage premiums plus 
interest accrued on such amounts. 
‘‘(e) USE BY INSURERS.— 
‘‘(1) QUALIFYING LOSSES.—For the purpose of 
this section, qualifying losses are insured losses by an 
insurer that are not excess losses and that do not in-
clude amounts for which Federal financial assistance 
pursuant to section 103(e) is received, notwith-
standing any limits otherwise applicable regarding 
section 103(e)(1)(C) (regarding program triggers) or 
section 102(11) (regarding insurer deductibles). 
‘‘(2) USE OF BUY-DOWN COVERAGE.—An insurer 
may use any buy-down coverage payments received 
under subsection (f) to satisfy— 
‘‘(A) the applicable insurer deductibles for 
the insurer; 
‘‘(B) the portion of the insurer’s losses that 
exceed the insurer deductible but are not com-
pensated by the Federal share; and 
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‘‘(C) the insurer’s obligations to pay for in-
sured losses if the Program trigger under section 
103(e)(1)(C) is not satisfied. 
‘‘(3) BUY-DOWN COVERAGE DOES NOT REDUCE 
FEDERAL CO-SHARE.—The receipt by an insurer of 
buy-down coverage under this section for insured 
losses shall not be considered with respect to calcu-
lating the insurer’s insured losses with respect to the 
insurer’s deductible and eligibility for Federal finan-
cial assistance pursuant to section 103(e). 
‘‘(4) INSOLVENCY.—An insurer may sell its 
rights to buy-down coverage from the Fund to another 
insurer as part of or to avoid an insolvency or as 
part of a merger, sale, or major reorganization. 
‘‘(f) PAYMENT OF BUY-DOWN COVERAGE.—The Fund 
shall pay the qualifying losses of an insurer purchasing 
buy-down coverage up to the amount described in subsection 
(d). 
‘‘(g) GOVERNMENT BORROWING.—The Secretary may 
borrow the funds from the Fund to offset, in whole or in 
part, the Federal share of compensation provided to all in-
surers under the Program, except that— 
‘‘(1) the Fund shall always immediately provide 
any buy-down coverage payments required under sub-
section (f); and 
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‘‘(2) any such amounts borrowed must be replen-
ished with appropriate interest. 
‘‘(h) RISK-SHARING
MECHANISMS.—The Secretary 
shall establish voluntary risk-sharing mechanisms for in-
surers purchasing buy-down coverage from the Fund to pool 
their reinsurance purchases and otherwise share terrorism 
risk. 
‘‘(i) TERMINATION.—Upon termination of the Pro-
gram under section 108, and subject to the Secretary’s con-
tinuing authority under section 108(b) to adjust claims in 
satisfaction under the Program, the Secretary shall provide 
that the Fund shall become a privately-operated mutual ter-
rorism reinsurance company owned by the insurers that 
have submitted buy-down coverage premiums in proportion 
to such premiums minus any buy-down coverage payments 
received.’’; and 
(2) in the table of contents in section 1(b), by in-
serting after the item relating to section 106 the fol-
lowing new item: 
‘‘Sec. 106A. Terrorism Buy-Down Fund.’’. 
SEC. 5. ANALYSIS AND STUDY. 
(a) ANALYSIS OF MARKET CONDITIONS.—Section 108 
of the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 
6701 note) is amended by striking subsection (e) and insert-
ing the following: 
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‘‘(e) ANALYSIS OF MARKET CONDITIONS FOR TER-
RORISM RISK INSURANCE.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the NAIC, representatives of the insurance 
industry, representatives of the securities industry, 
and representatives of policyholders, shall perform an 
analysis regarding the long-term availability and af-
fordability of insurance for terrorism risk in the pri-
vate marketplace, including coverage for— 
‘‘(A) property and casualty insurance; 
‘‘(B) group life insurance; 
‘‘(C) workers’ compensation; 
‘‘(D) nuclear, biological, chemical, and ra-
diological events; and 
‘‘(E) commercial real estate. 
‘‘(2) BIENNIAL REPORTS.—The Secretary shall 
submit biennial reports to the Committee on Finan-
cial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate, on its findings pursuant to the analysis 
conducted under paragraph (1). The first such report 
shall be submitted not later than the expiration of the 
24-month period beginning on the date of the enact-
ment of the Terrorism Risk Insurance Revision and 
Extension Act of 2007. 
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‘‘(3) TESTIMONY.—Upon submission of each bi-
ennial report under paragraph (2), the Secretary 
shall provide oral testimony to the Committee on Fi-
nancial Services of the House of Representatives and 
Committee on Banking, Housing, and Urban Affairs 
of the United States Senate regarding the report and 
the analysis under this subsection for which the report 
is submitted.’’. 
(b) COMMISSION ON TERRORISM RISK INSURANCE.— 
Title I of the Terrorism Risk Insurance Act of 2002 (15 
U.S.C. 6701 note) is amended— 
(1) by adding at the end the following new sec-
tion: 
‘‘SEC. 109. COMMISSION ON TERRORISM RISK INSURANCE. 
‘‘(a) ESTABLISHMENT.—There is hereby established the 
Commission on Terrorism Risk Insurance (in this section 
referred to as the ‘Commission’). 
‘‘(b) MEMBERSHIP.— 
‘‘(1) The Commission shall consist of 21 mem-
bers, as follows: 
‘‘(A) The Secretary of the Treasury or the 
designee of the Secretary. 
‘‘(B) One member who is a State insurance 
commissioner, designated by the NAIC. 
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‘‘(C) 15 members, who shall be appointed by 
the President, who shall include— 
‘‘(i) a representative of group life in-
surers; 
‘‘(ii) a representative of property and 
casualty insurers with direct earned pre-
mium of $1,000,000,000 or less; 
‘‘(iii) a representative of property and 
casualty insurers with direct earned pre-
mium of more than $1,000,000,000; 
‘‘(iv) a representative of multiline in-
surers; 
‘‘(v) a representative of independent 
insurance agents; 
‘‘(vi) a representative of insurance bro-
kers; 
‘‘(vii) a policyholder representative; 
‘‘(viii) a representative of the survivors 
of the victims of the attacks of September 
11, 2001; 
‘‘(ix) a representative of the reinsur-
ance industry; 
‘‘(x) a representative of workers’ com-
pensation insurers; 
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‘‘(xi) a representative from the com-
mercial mortgage-backed securities industry; 
‘‘(xii) a representative from a nation-
ally recognized statistical rating organiza-
tion; 
‘‘(xiii) a real estate developer; 
‘‘(xiv) a representative of workers’ com-
pensation insurers created by State legisla-
tures, selected in consultation with the 
American Association of State Compensa-
tion Insurance Funds from among its mem-
bers; and 
‘‘(xv) a representative from the com-
mercial real estate brokerage industry or the 
commercial property management industry. 
‘‘(D) Four members, who shall serve as liai-
sons to the Congress, who shall include two mem-
bers jointly selected by the Chairman and Rank-
ing Member of the Committee on Financial Serv-
ices of the House of Representatives and two 
members jointly selected by the Chairman and 
Ranking Member of the Committee on Banking, 
Housing, and Urban Affairs of the Senate. 
‘‘(2) SECRETARY.—The Program Director of the 
Terrorism Risk Insurance Act of the Department of 
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the Treasury shall serve as Secretary of the Commis-
sion. The Secretary of the Commission shall deter-
mine the manner in which the Commission shall op-
erate, including funding and staffing. 
‘‘(c) DUTIES.— 
‘‘(1) IN GENERAL.—The Commission shall iden-
tify and make recommendations regarding— 
‘‘(A) possible actions to encourage, facili-
tate, and sustain provision by the private insur-
ance industry in the United States of affordable 
coverage for losses due to an act or acts of ter-
rorism; 
‘‘(B) possible actions or mechanisms to sus-
tain or supplement the ability of the insurance 
industry in the United States to cover losses re-
sulting from acts of terrorism in the event that— 
‘‘(i) such losses jeopardize the capital 
and surplus of the insurance industry in 
the United States as a whole; or 
‘‘(ii) other consequences from such acts 
occur, as determined by the Commission, 
that may significantly affect the ability of 
the insurance industry in the United States 
to cover such losses independently; and 
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‘‘(C) possible actions to significantly reduce 
the Federal role in covering losses resulting from 
acts of terrorism. 
‘‘(2) EVALUATIONS.—In identifying and making 
the recommendations required under paragraph (1), 
the Commission shall specifically evaluate the utility 
and viability of proposals aimed at improving the 
availability of insurance against terrorism risk in the 
private marketplace. 
‘‘(3) INITIAL MEETING.—The Commission shall 
hold its first meeting during the 3-month period that 
begins 15 months after the date of the enactment of 
the Terrorism Risk Insurance Revision and Extension 
Act of 2007. 
‘‘(4) REPORTS.— 
‘‘(A) CONTENTS.—The Commission shall 
submit two reports to the Congress that— 
‘‘(i) evaluate and make recommenda-
tions regarding whether there is a need for 
a Federal terrorism risk insurance pro-
gram; 
‘‘(ii) if so, include a specific, detailed 
recommendation for the replacement of the 
Program under this title; and 
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‘‘(iii) include the identifications, eval-
uations, and recommendations required 
under paragraphs (1) and (2). 
‘‘(B) TIMING.—The first report required 
under subparagraph (A) shall be submitted be-
fore the expiration of the 60-month period begin-
ning on the date of the enactment of the Ter-
rorism Risk Insurance Revision and Extension 
Act of 2007. The second such report shall be sub-
mitted before the expiration of the 96-month pe-
riod beginning upon such date of enactment.’’; 
and 
(2) in the table of contents in section 1(b), by in-
serting after the item relating to section 108 the fol-
lowing new item: 
‘‘Sec. 109. Commission on Terrorism Risk Insurance.’’. 
SEC. 6. APPLICABILITY. 
The amendments made by this Act shall apply begin-
ning on January 1, 2008. The provisions of the Terrorism 
Risk Insurance Act of 2002, as in effect on the day before 
the date of the enactment of this Act, shall apply through 
the end of December 31, 2007. 
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Union Calendar No. 201 
110TH CONGRESS 
1ST SESSION 
H. R. 2761 
[Report No. 110–318] 
A BILL 
To extend the Terrorism Insurance Program of the 
Department of the Treasury, and for other pur-
poses. 
SEPTEMBER 6, 2007 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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