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;
‘‘(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.
‘‘(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.
‘‘(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
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.
‘‘(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
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.
‘‘(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;
‘‘(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;
‘‘(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
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—