‘‘(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 
terrorism’ means an act of terrorism involving nu-
clear, biological, chemical and, or, radiological reac-
tions, releases, or contaminations, to the extent any 
insured losses are caused by any such reactions, re-
leases, or contaminations. 
‘‘(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 
period 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 
insurance, other than non-contractual legal li-
ability 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 commer-
cial policyholder. 
‘‘(B) The person provides skilled services 
in loss prevention, loss reduction, or risk and 
insurance coverage analysis, and purchase of in-
surance. 
‘‘(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/Insurance Institute of America. 
‘‘(iii) A designation as an Associate in 
Risk Management (ARM) issued by Amer-
ican Institute for CPCU/Insurance Insti-
tute of America. 
‘‘(iv) A designation as a Certified 
Risk Manager (CRM) issued by the Na-
tional Alliance for Insurance Education & 
Research. 
‘‘(v) A designation as a Fellow in Risk 
Management (FRM) issued by the Global 
Risk Management Institute/Risk & Insur-
ance Management. 
‘‘(vi) At least 5 years of experience in 
1 or more of the following areas of com-
mercial property insurance and/or commer-
cial casualty 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 Common-
wealth of the Northern Mariana Islands, American 
Samoa, Guam, each of the United States Virgin Is-
lands, and any territory or possession of the United 
States. 
‘‘(23) TRANSPARENT
STANDARDS.—The term 
‘transparent standards’ means that any disapproval 
of a rate or form filing for an applicable line of in-
surance— 
‘‘(A) is clearly stated in writing; 
‘‘(B) is based on specific standards that 
are published in a State statute, rule, or regula-
tion (with general ‘public policy’ grounds alone 
not being considered a specific standard unless 
based on a good faith comprehensive actuarial 
analysis by the State of a covered risk); and
‘‘(C) if based on an interpretation, is based 
on an identical or substantially similar interpre-
tation by majority of States with interpretations 
of an identical or substantially similar provision 
of a statute or regulation, if a substantial num-
ber of States has made such interpretation. 
‘‘(24) UNITED
STATES.—The term ‘United 
States’ means the several States, and includes the 
territorial sea and the continental shelf of the 
United States, as those terms are defined in the Vio-
lent Crime Control and Law Enforcement Act of 
1994 (18 U.S.C. 2280, 2281). 
‘‘(25) WORKERS’ COMPENSATION.—The term 
‘workers’ compensation’ means insurance against 
loss from liability imposed by law upon employers to 
compensate employees and their dependents for in-
jury sustained by the employees arising out of and 
in the course of the employment, irrespective of neg-
ligence or of the fault of either party. 
‘‘(26) 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 Insur-
ance Program. 
‘‘(2) AUTHORITY
OF
THE
SECRETARY.—Not-
withstanding 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 
payment may be made by the Secretary under this section 
with respect to an insured loss that is covered by an in-
surer, 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 enact-
ment; 
‘‘(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 en-
actment 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 
Secretary may prescribe; and 
‘‘(4) the insurer submits to the Secretary, in ac-
cordance with such reasonable procedures as the 
Secretary 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 ter-
rorism; and 
‘‘(2) shall make available, in any of its covered 
lines of insurance policies that exclude coverage for 
losses resulting from NBCR terrorism, coverage for 
losses resulting from NBCR terrorism that may dif-
fer materially from the terms, amounts, and other 
coverage limitations applicable to losses arising from 
events other than NBCR terrorism. 
‘‘(d) STATE RESIDUAL MARKET INSURANCE ENTI-
TIES.— 
‘‘(1) IN GENERAL.—The Secretary shall issue 
regulations, as soon as practicable after the date of 
enactment of this Act, that apply the provisions of
this title to State residual market insurance entities 
and State workers’ compensation funds. 
‘‘(2) TREATMENT OF CERTAIN ENTITIES.—For 
purposes of the regulations issued pursuant to para-
graph (1)— 
‘‘(A) a State residual market insurance en-
tity that does not share its profits and losses 
with private sector insurers shall be treated as 
a separate insurer; and 
‘‘(B) a State residual market insurance en-
tity that shares its profits and losses with pri-
vate sector insurers shall not be treated as a 
separate insurer, and shall report to each pri-
vate sector insurance participant its share of 
the insured losses of the entity, which shall be 
included in each private sector insurer’s insured 
losses. 
‘‘(3) TREATMENT OF PARTICIPATION IN CER-
TAIN ENTITIES.—Any insurer that participates in 
sharing profits and losses of a State residual market 
insurance entity shall include in its calculations of 
premiums any premiums distributed to the insurer 
by the State residual market insurance entity. 
‘‘(e) INSURED LOSS SHARED COMPENSATION.— 
‘‘(1) FEDERAL SHARE.—