‘‘(i) The applicable insurer deductibles 
for the insurer. 
‘‘(ii) The portion of the insurer’s losses 
that exceed the insurer deductible but are 
not compensated by the Federal share pur-
suant to paragraph (1). 
‘‘(iii) The insurer’s obligations to pay 
for insured losses if the program trigger es-
tablished in paragraph (1)(B) is not satis-
fied. 
‘‘(iv) Any risk sharing obligations the 
insurer may have under any agreements 
made pursuant to or in accordance with 
paragraph (3). 
‘‘(D) TERMINATION.— 
‘‘(i) TERMINATION
OF
PROGRAM.— 
Upon termination of the Program under 
section 108(a), and subject to the Sec-
retary’s continuing authority under section 
108(b) to adjust claims in satisfaction of the 
Federal share of compensation under the 
Program as provided in paragraph (1) of 
this subsection, 10 percent of each insurer’s 
CRF funds shall be remitted to the Sec-
retary and the remainder shall be remitted
to the insurer. The Secretary shall deter-
mine the manner in which the remittance of 
such income to the insurer shall be made. 
‘‘(ii) ELIMINATION OF FEDERAL SHARE 
OF
COMPENSATION.—If the Program re-
mains in effect but the Federal share of 
compensation for insured losses under the 
Program is eliminated from the Program, 
the CRF funds shall be retained and used 
for the purposes set forth in subparagraph 
(C) of this paragraph. At such time as an 
insurer’s liability for insured losses under 
the Program terminates, as a consequence of 
the insurer’s termination of its business or 
otherwise, the insurer shall remit any re-
maining CRF funds to the Secretary. 
‘‘(3) RISK-SHARING MECHANISMS.— 
‘‘(A) FINDING; RULE OF CONSTRUCTION.— 
Congress finds that it is desirable to encourage 
the growth of nongovernmental, private market 
reinsurance capacity for protection against losses 
arising from acts of terrorism. Therefore, nothing 
in this title shall prohibit insurers from devel-
oping risk-sharing mechanisms (including mu-
tual reinsurance facilities and agreements) to
voluntarily reinsure terrorism losses between and 
among themselves that are not subject to reim-
bursement under this section 103. 
‘‘(B) ESTABLISHMENT OF ADVISORY COM-
MITTEE.—The Secretary shall appoint an Advi-
sory Committee to— 
‘‘(i) encourage the creation and devel-
opment of such mechanisms; 
‘‘(ii) assist the Secretary and be avail-
able to administer such mechanisms; and 
‘‘(iii) develop articles of incorporation, 
bylaws, and a plan of operation for any 
long-term reinsurance facility authorized or 
created in the future. 
‘‘(C) MEMBERSHIP.—The Advisory Com-
mittee shall be composed of nine members who 
are directors, officers, or other employees of in-
surers that are participating or that desire to 
participate in such mechanisms, and who are 
representative of the affected sectors of the insur-
ance industry. In making these appointments, 
the Secretary shall solicit major trade associa-
tions of the insurance industry to nominate lists 
of qualified individuals representative of the 
commercial property insurance, commercial cas-
ualty insurance, group life insurance, and rein-
surance industries. 
‘‘(4) CAP ON ANNUAL LIABILITY.— 
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1) or any other provision of Federal or 
State law, if the aggregate insured losses exceed 
$100,000,000,000 during any Program Year 
(until such time as the Congress may act other-
wise with respect to such losses)— 
‘‘(i) the Secretary shall not make any 
payment under this title for any portion of 
the amount of such losses that exceeds 
$100,000,000,000; and 
‘‘(ii) no insurer that has met its in-
surer deductible shall be liable for the pay-
ment of any portion of that amount that ex-
ceeds $100,000,000,000. 
‘‘(B) INSURER
SHARE.—For purposes of 
subparagraph (A), the Secretary shall determine 
the pro rata share of insured losses to be paid by 
each insurer that incurs insured losses under the 
Program. 
‘‘(5) NOTICE TO CONGRESS.—The Secretary shall 
notify the Congress if estimated or actual aggregate 
insured losses exceed $100,000,000,000 during during
any Program Year and the Congress shall determine 
the procedures for and the source of any payments for 
such excess insured losses. 
‘‘(6) FINAL NETTING.—The Secretary shall have 
sole discretion to determine the time at which claims 
relating to any insured loss or act of terrorism shall 
become final. 
‘‘(7) DETERMINATIONS FINAL.—Any determina-
tion of the Secretary under this subsection shall be 
final, unless expressly provided, and shall not be sub-
ject to judicial review. 
‘‘(8) FULL RECOUPMENT OF FEDERAL SHARE.— 
The Secretary shall collect, for repayment of the Fed-
eral financial assistance provided in connection with 
all acts of terrorism (or acts of war, in the case of 
workers’ compensation and group life insurance), ter-
rorism loss risk-spreading premiums in an amount 
equal to the total amount paid by the Secretary in 
accordance with this section. 
‘‘(9) POLICY SURCHARGE FOR TERRORISM LOSS 
RISK-SPREADING PREMIUMS.— 
‘‘(A) 
POLICYHOLDER
PREMIUM.—Any 
amount established by the Secretary as a ter-
rorism loss risk-spreading premium shall—
‘‘(i) be imposed as a policyholder pre-
mium surcharge on all covered lines of in-
surance policies in force after the date of 
such establishment; 
‘‘(ii) begin with such period of coverage 
during the year as the Secretary determines 
appropriate; and 
‘‘(iii) be based on a percentage of the 
premium amount charged for covered lines 
of insurance coverage under the policy. 
‘‘(B) COLLECTION.—The Secretary shall 
provide for insurers to collect terrorism loss risk- 
spreading premiums and remit such amounts 
collected to the Secretary. 
‘‘(C) PERCENTAGE
LIMITATION.—A ter-
rorism loss risk-spreading premium may not ex-
ceed, on an annual basis, the amount equal to 3 
percent of the premium charged for covered lines 
of insurance coverage under the policy. 
‘‘(D) ADJUSTMENT FOR URBAN AND SMALL-
ER COMMERCIAL AND RURAL AREAS AND DIF-
FERENT LINES OF INSURANCE.— 
‘‘(i) ADJUSTMENTS.—In determining 
the method and manner of imposing ter-
rorism loss risk-spreading premiums, in-
cluding the amount of such premiums, the 
Secretary shall take into consideration— 
‘‘(I) the economic impact on com-
mercial centers of urban areas, includ-
ing the effect on commercial rents and 
commercial insurance premiums, par-
ticularly rents and premiums charged 
to small businesses, and the avail-
ability of lease space and commercial 
insurance within urban areas; 
‘‘(II) the risk factors related to 
rural areas and smaller commercial 
centers, including the potential expo-
sure to loss and the likely magnitude of 
such loss, as well as any resulting 
cross-subsidization that might result; 
and 
‘‘(III) the various exposures to 
terrorism risk for different lines of in-
surance. 
‘‘(ii) 
RECOUPMENT
OF
ADJUST-
MENTS.—Any recoupment amounts not col-
lected by the Secretary because of adjust-
ments under this subparagraph shall be re-
couped through additional terrorism loss 
risk-spreading premiums. 
‘‘(E) TIMING OF PREMIUMS.—The Secretary 
may adjust the timing of terrorism loss risk- 
spreading premiums to provide for equivalent 
application of the provisions of this title to poli-
cies that are not based on a calendar year, or to 
apply such provisions on a daily, monthly, or 
quarterly basis, as appropriate. 
‘‘(F) REPLENISHMENT OF TRIA CAPITAL RE-
SERVE FUNDS.—After any funds expended di-
rectly from the United States Treasury are fully 
repaid, the balance of the amounts collected 
under this paragraph shall be used to fully re-
plenish all insurer CRFs used by the Secretary 
in accordance with the provisions of paragraph 
(2)(C) that were not used by the insurer to sat-
isfy its obligations in accordance with clauses (i) 
through (iv) of paragraph (2)(C). 
‘‘(f) CAPTIVE INSURERS AND OTHER SELF-INSURANCE 
ARRANGEMENTS.—The Secretary may, in consultation with 
the NAIC or the appropriate State regulatory authority, 
apply the provisions of this title, as appropriate, to other 
classes or types of captive insurers and other self-insurance 
arrangements by municipalities and other entities (such as
workers’ compensation self-insurance programs and State 
workers’ compensation reinsurance pools), but only if such 
application is determined before the occurrence of an act 
of terrorism in which such an entity incurs an insured loss 
and all of the provisions of this title are applied comparably 
to such entities. 
‘‘(g) REINSURANCE TO COVER EXPOSURE.— 
‘‘(1) OBTAINING COVERAGE.—This title may not 
be construed to limit or prevent insurers from obtain-
ing reinsurance coverage for insurer deductibles or in-
sured losses retained by insurers pursuant to this sec-
tion, nor shall the obtaining of such coverage affect 
the calculation of such deductibles or retentions. 
‘‘(2) LIMITATION ON FINANCIAL ASSISTANCE.— 
The amount of financial assistance provided pursuant 
to this section, including amounts from a CRF used 
pursuant to subsection (e)(2)(C), shall not be reduced 
by reinsurance paid or payable to an insurer from 
other sources, except that recoveries from such other 
sources, taken together with financial assistance for 
the Transition Period or a Program Year provided 
pursuant to this section, may not exceed the aggregate 
amount of the insurer’s insured losses for such period. 
If such recoveries and financial assistance for the 
Transition Period or a Program Year exceed such ag-
gregate amount of insured losses for that period and 
there is no agreement between the insurer and any re-
insurer to the contrary, an amount in excess of such 
aggregate insured losses shall be returned to the Sec-
retary. 
‘‘(h) PERSONAL LINES STUDY.— 
‘‘(1) IN GENERAL.—The Comptroller General of 
the United States, after consultation with the NAIC, 
representatives of the insurance industry, and other 
experts in the insurance field, including a cross-sec-
tion of insurers, independent insurance agents and 
brokers, and policyholders, shall conduct a study con-
cerning the exposure of personal lines (including 
homeowners insurance) to terrorism risk, the coverage 
currently available, and potential policy responses. 
‘‘(2) REPORT.—Not later than September 1, 
2006, the Comptroller General shall submit a report 
to the Congress on the results of the study conducted 
under subparagraph (1), together with specific policy 
recommendations. 
‘‘(i) STUDY OF RISKS STEMMING FROM NUCLEAR, BI-
OLOGICAL, CHEMICAL AND RADIOACTIVE EVENTS.— 
‘‘(1) IN GENERAL.—The Comptroller General of 
the United States, after consultation with the NAIC, 
representatives of the insurance industry, including a
cross-section of insurers, independent insurance 
agents and brokers, and policyholders, and other ex-
perts in the insurance field, shall conduct a study 
concerning the risk of potential terrorist acts stem-
ming from the use of nuclear, biological, chemical, 
and radioactive weapons. 
‘‘(2) REPORT.—Not later than September 1, 
2006, the Comptroller General shall submit a report 
to the Congress on the results of the study conducted 
under paragraph (1), together with specific policy 
recommendations. 
‘‘(j) STUDY OF NEED FOR FEDERAL NATURAL DIS-
ASTER CATASTROPHE PROGRAM.— 
‘‘(1) IN GENERAL.—The Comptroller General of 
the United States, after consultation with the NAIC, 
representatives of the insurance industry, including a 
cross-section of insurers, independent insurance 
agents and brokers, and policyholders, and other ex-
perts in the insurance field, shall conduct a study 
concerning the need for a Federal program that pro-
vides for a system of shared public and private com-
pensation for insured losses resulting from natural 
disaster. 
‘‘(2) ISSUES.—The study under this section shall 
include an analysis of whether, and in what manner,
such a Federal program should incorporate any or all 
of the following concepts: tax-free capital reserves; vol-
untary mutual reinsurance pools; a distinction be-
tween sophisticated and non-sophisticated commercial 
purchasers for the purposes of exemption from regula-
tion; or Federal support for the purchase of reinsur-
ance by State disaster insurance programs. 
‘‘(3) REPORT.—Not later than September 1, 
2006, the Comptroller General shall submit a report 
to the Congress on the results of the study conducted 
under this subsection together with specific policy rec-
ommendations. 
‘‘SEC. 104. GENERAL AUTHORITY AND ADMINISTRATION OF 
CLAIMS. 
‘‘(a) GENERAL AUTHORITY.—The Secretary shall have 
the powers and authorities necessary to carry out the pro-
gram, including authority— 
‘‘(1) to investigate and audit all claims under 
the Program; and 
‘‘(2) to prescribe regulations and procedures to 
effectively administer and implement the Program, 
and to ensure that all insurers and self-insured enti-
ties that participate in the Program are treated com-
parably under the Program.