Terrorism Risk Insurance Act of 2002
PL 107-297 (H.R.3210), enacted 11/26/2002

116 STAT. 2322 
PUBLIC LAW 107-297—NOV. 26, 2002 
Public Law 107-297 
107th Congress 
An Act 
Nov. 26, 2002 
To ensure the continued financial capacity of insurers to provide coverage for 
rjj jj 32101 
risks from terrorism. 
Be it enacted by the Senate and House of Representatives 
of 
Terrorism Risk 
the United States of America in Congress assembled, 
Insurance Act of 
2002. 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
15 use 6701 
(a) SHORT TITLE.—^This Act may be cited as the "Terrorism 
note. 
Risk Insurance Act of 2002". 
(b) TABLE OF CONTENTS.—^The table of contents for this Act 
is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—TERRORISM INSURANCE PROGRAM 
Sec. 101. Congressional findings and purpose. 
Sec. 102. Definitions. 
Sec. 103. Terrorism Insurance Program. 
Sec. 104. General authority and administration of claims. 
Sec. 105. Preemption and nullification of pre-existing terrorism exclusions. 
Sec. 106. Preservation provisions. 
Sec. 107. Litigation management. 
Sec. 108. Termination of Program. 
TITLE II—TREATMENT OF TERRORIST ASSETS 
Sec. 201. Satisfaction of judgments from blocked assets of terrorists, terrorist orga-
nizations, and State sponsors of terrorism. 
TITLE 
III—FEDERAL 
RESERVE 
BOARD PROVISIONS 
Sec. 301. Certain authority of the Board of Governors of the Federal Reserve Sys-
tem. 
15 u s e 6701 
note. 
TITLE I—TERRORISM INSURANCE 
PROGRAM 
SEC. 101. CONGRESSIONAL FINDINGS AND PURPOSE. 
(a) FINDINGS.—^The Congress finds that— 
(1) the ability of businesses and individuals to obtain prop-
erty and casualty insurance at reasonable and predictable 
prices, in order to spread the risk of both routine and cata-
strophic loss, is critical to economic growth, urban development, 
and the construction 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 which allow mutualization 
of risk and the efficient use of financial resources and enhance 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2323 
the ability of the economy to maintain stabiHty, 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 attacks, while maintaining the stability 
of the economy; 
(4) widespread financial market uncertainties have arisen 
following the terrorist attacks of September 11, 2001, including 
the absence of information from which financial institutions 
can make statistically 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 ter-
rorism; 
(5) a decision by property and casualty insurers to deal 
with such uncertainties, either by terminating property and 
casualty coverage for losses arising from terrorist events, or 
by radically escalating premium coverage to compensate for 
risks of loss that are not readily predictable, could seriously 
hamper ongoing and planned construction, property acquisition, 
and other business projects, generate a dramatic increase in 
rents, and otherwise suppress economic activity; and 
(6) the United States Government should provide tem-
porary 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 systems, mechanisms, products, and programs necessary 
to create a viable financial services market for private terrorism 
risk insurance. 
(b) PURPOSE.—^The purpose of this title is to establish a tem-
porary Federal program that provides for a transparent system 
of shared public and private compensation for insured losses 
resulting from acts of terrorism, in order to— 
(1) protect consumers by addressing market disruptions 
and ensure the continued widespread availability and afford-
ability of property and casualty insurance for terrorism risk; 
and 
(2) allow for a transitional period for the private markets 
to stabilize, resume pricing of such insurance, and build 
capacity to absorb any future losses, while preserving State 
insurance regulation and consumer protections. 
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, 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; 
116 STAT. 2324 
PUBLIC LAW 107-297—NOV. 26, 2002 
(iii) to have resulted in damage within the United 
States, or outside of the United States in the case 
of— 
(I) an air carrier or vessel described in para-
graph (5)(B); or 
(II) the premises of a United States mission; 
and 
(iv) to have been committed by an individual or 
individuals acting on behalf of any foreign person or 
foreign interest, as part of an effort 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 certified by the Sec-
retary as an act of terrorism if— 
(i) the act is committed as part of the course of 
a war declared by the Congress, except that this clause 
shall not apply with respect to any coverage for 
workers' compensation; or 
(ii) 
property 
and 
casualty 
insurance 
losses 
resulting from the act, in the aggregate, do not exceed 
$5,000,000. 
(C) DETERMINATIONS FINAL.—^Any certification of, or 
determination not to certify, an act as an act of terrorism 
under this paragraph shall be final, and shall not be subject 
to judicial review. 
(D) NONDELEGATION.—^The Secretary may not delegate 
or designate to any other officer, employee, or person, any 
determination under this paragraph of whether, during 
the effective period of the Program, an act of terrorism 
has occurred. 
(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) CONTROL.—An entity has "control" over another entity, 
if— 
(A) the entity directly or indirectly or acting through 
1 or more other persons owns, controls, or has power to 
vote 25 percent or more of any class of voting securities 
of the other entity; 
(B) the entity controls in any manner the election 
of a majority of the directors or trustees of the other entity; 
or 
(C) the Secretary determines, after notice and oppor-
tunity for hearing, that the entity directly or indirectly 
exercises a controlling influence over the management or 
policies of the other entity. 
(4) DIRECT EARNED PREMIUM.—The term "direct earned 
premium" means a direct earned premium for property and 
casualty insurance issued by any insurer for insurance against 
losses occurring at the locations described in subparagraphs 
(A) and (B) of paragraph (5). 
(5) INSURED LOSS.—^The term "insured loss" means any 
loss resulting from an act of terrorism (including an act of 
war, in the case of workers' compensation) that is covered 
by primary or excess property and casualty insurance issued 
by an insurer if such loss— 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2325 
(A) occurs within the United States; or 
(B) occurs to an air carrier (as defined in section 40102 
of title 49, United States Code), to a United States flag 
vessel (or a vessel based principally in the United States, 
on which United States income tax is paid and whose 
insurance coverage is subject to regulation in the United 
States), regardless of where the loss occurs, or at the prem-
ises of any United States mission. 
(6) 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 in any State; 
(ii) not licensed or admitted as described in clause 
(i), if it is an eligible surplus line carrier listed on 
the Quarterly Listing of Alien Insurers of the NAIC, 
or any successor thereto; 
(iii) approved for the purpose of offering property 
and casualty insurance by a Federal agency in connec-
tion with maritime, energy, or aviation activity; 
(iv) a State residual market insurance entity or 
State workers' compensation fund; or 
(v) any other entity described in section 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 casualty insurance coverage, 
other than in the case of entities described in sections 
103(d) and 103(f); and 
(C) that meets any other criteria that the Secretary 
may reasonably prescribe. 
(7) INSURER DEDUCTIBLE.—The term "insurer 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 calendar year immediately pre-
ceding Program Year 1, multiplied by 7 percent; 
(C) for Program Year 2, the value of an insurer's direct 
earned premiums over the calendar year immediately pre-
ceding Program Year 2, multiplied by 10 percent; 
(D) for Program Year 3, the value of an insurer's 
direct earned premiums over the calendar year immediately 
preceding Program Year 3, multiplied by 15 percent; and 
(E) notwithstanding subparagraphs (A) through (D), 
for the Transition Period, Program Year 1, Program Year 
2, or Program Year 3, if an insurer has not had a full 
year of operations during the calendar year immediately 
preceding such Period or Program Year, such portion of 
the direct earned premiums of the insurer as the Secretary 
determines appropriate, subject to appropriate methodolo-
gies established by the Secretary for measuring such direct 
earned premiums. 
(8) NAIC—The term "NAIC" means the National Associa-
tion of Insura'nce Commissioners. 
116 STAT. 2326 
PUBLIC LAW 107-297—NOV. 26, 2002 
(9) 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. 
(10) PROGRAM.—The term "Program" means the Terrorism 
Insurance Program established by this title. 
(11) 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 i.—The term "Program Year 1" 
means the period beginning on January 1, 2003 and ending 
on December 31, 2003. 
(C) PROGRAM YEAR 2.—The term "Program Year 2" 
means the period beginning on January 1, 2004 and ending 
on December 31, 2004. 
(D) PROGRAM YEAR 3.—^The term "Program Year 3" 
means the period beginning on January 1, 2005 and ending 
on December 31, 2005. 
(12) PROPERTY AND CASUALTY INSURANCE.—The term "prop-
erty and casualty insurance"— 
(A) means commercial lines of property and casualty 
insurance, including excess insurance, workers'compensa-
tion insurance, and surety insurance; and 
(B) does not include— 
(i) Federal crop insurance issued or reinsured 
under the Federal Crop Insurance Act (7 U.S.C. 1501 
et seq.), or any other type of crop or livestock insurance 
that is privately issued or reinsured; 
(ii) private mortgage insurance (as that term is 
defined in section 2 of the Homeowners Protection 
Act of 1998 (12 U.S.C. 4901)) or title insurance; 
(iii) financial 
guaranty 
insurance 
issued 
by 
monoline financial guaranty insurance corporations; 
(iv) insurance for medical malpractice; 
(v) health or life insurance, including group life 
insurance; 
(vi) flood insurance provided under the National 
Flood Insurance Act of 1968 (42 U.S.C. 4001 et seq.); 
or 
(vii) reinsurance or retrocessional reinsurance. 
(13) SECRETARY.—The term "Secretary" means the Sec-
retary of the Treasury. 
(14) STATE.—The term "State" means any State of the 
United States, the District of Columbia, the Commonwealth 
of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, American Samoa, Guam, each of the United States 
Virgin Islands, and any territory or possession of the United 
States. 
(15) UNITED STATES.—The term "United States" means the 
several States, and includes the territorial sea and the conti-
nental shelf of the United States, as those terms are defined 
in the Violent Crime Control and Law Enforcement Act of 
1994 (18 U.S.C. 2280, 2281). 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2327 
(16) 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 Insurance Program. 
(2) AUTHORITY OF THE SECRETARY.—Notwithstanding 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 insurer, 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 Deadline, 
the date of enactment of this Act, not later than 90 days 
after that date of enactment; 
(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 enactment of this Act, on a 
separate line item in the policy, at the time of offer, pur-
chase, and renewal of the policy; 
(3) the insurer processes the claim for the insured 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 accordance 
with such reasonable procedures as the Secretary may 
establish— 
(A) a claim for payment of the Federal share of com-
pensation for insured losses under the Program; 
(B) written certification— 
(i) of the underlying claim; and 
(ii) of all pa5Tnents made for insured losses; and 
(C) certification of its compliance with the provisions 
of this subsection. 
(c) MANDATORY AVAILABILITY.— 
(1) INITIAL PROGRAM PERIODS.—^During the period begin-
ning on the first day of the Transition Period and ending 
on the last day of Program Year 2, each entity that meets 
the definition of an insurer under section 102— 
116 STAT. 2328 
PUBLIC LAW 107-297—NOV. 26, 2002 
Deadline. 
Regulations. 
(A) shall make available, in all of its property and 
casualty insurance policies, coverage for insured losses; 
and 
(B) shall make available property and casualty insur-
ance coverage for insured losses that does not differ materi-
ally from the terms, amounts, and other coverage limita-
tions applicable to losses arising from events other than 
acts of terrorism. 
(2) PROGRAM YEAR 3.—^Not later than September 1, 2004, 
the Secretary shall, based on the factors referred to in section 
108(d)(1), determine whether the provisions of subparagraphs 
(A) and (B) of paragraph (1) should be extended tlu-ough Pro-
gram Year 3. 
(d) STATE RESIDUAL MARKET INSURANCE ENTITIES.— 
(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 paragraph (1)— 
(A) a State residual market insurance entity 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 entity that 
shares its profits and losses with private sector insurers 
shall not be treated as a separate insurer, and shall report 
to each private 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 CERTAIN 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.— 
(A) IN GENERAL.—The Federal share of compensation 
under the Program to be paid by the Secretary for insured 
losses of an insurer during the Transition Period and each 
Program Year shall be equal to 90 percent of that portion 
of the amount of such insured losses that exceeds the 
applicable insurer deductible required to be paid during 
such Transition Period or such Program Year. 
(B) PROHIBITION ON DUPLICATIVE COMPENSATION.—^The 
Federal share of compensation for insured losses under 
the Program shall be reduced by the amount of compensa-
tion provided by the Federal Government to any person 
under any other Federal program for those insured losses. 
(2) CAP ON ANNUAL LIABILITY.— 
(A) IN GENERAL.—Notwithstanding paragraph (1) or 
any other provision of Federal or State law, if the aggregate 
insured losses exceed $100,000,000,000, during the period 
beginning on the first day of the Transition Period and 
ending on the last day of Program Year 1, or during Pro-
gram Year 2 or Program Year 3 (until such time as the 
Congress may act otherwise with respect to such losses)— 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2329 
(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 insurer deductible 
shall be liable for the payment of any portion of that 
amount that exceeds $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. 
(3) NOTICE TO CONGRESS.—The Secretary shall notify the 
Congress if estimated or actual aggregate insured losses exceed 
$100,000,000,000 during the period beginning on the first day 
of the Transition Period and ending on the last day of Program 
Year 1, or during Program Year 2 or Program Year 3, and 
the Congress shall determine the procedures for and the source 
of any payments for such excess insured losses. 
(4) FINAL NETTING.—^The Secretary shall have sole discre-
tion to determine the time at which claims relating to any 
insured loss or act of terrorism shall become final. 
(5) DETERMINATIONS FINAL.—Any determination of the Sec-
retary under this subsection shall be final, unless expressly 
provided, and shall not be subject to judicial review. 
(6) 
INSURANCE 
MARKETPLACE 
AGGREGATE 
RETENTION 
AMOUNT.—For purposes of paragraph (7), the insurance market-
place aggregate retention amount shall be— 
(A) for the period beginning on the first day of the 
Transition Period and ending on the last day of Program 
Year 1, the lesser of— 
(i) $10,000,000,000; and 
(ii) the aggregate amount, for all insurers, of 
insured losses during such period; 
(B) for Program Year 2, the lesser of— 
(i) $12,500,000,000; and 
(ii) the aggregate amount, for all insurers, of 
insured losses during such Program Year; and 
(C) for Program Year 3, the lesser of— 
(i) $15,000,000,000; and 
(ii) the aggregate amount, for all insurers, of 
insured losses during such Program Year. 
(7) RECOUPMENT OF FEDERAL SHARE.— 
(A) MANDATORY RECOUPMENT AMOUNT.—For purposes 
of this paragraph, the mandatory recoupment amount for 
each of the periods referred to in subparagraphs (A), (B), 
and (C) of paragraph (6) shall be the difference between— 
(i) the insurance marketplace aggregate retention 
amount under paragraph (6) for such period; and 
(ii) the aggregate amount, for all insurers, of 
insured losses during such period that are not com-
pensated by the Federal (Government because such 
losses— 
(I) are within the insurer deductible for the 
insurer subject to the losses; or 
(II) are within the portion of losses of the 
insurer that exceed the insurer deductible, but 
are not compensated pursuant to paragraph (1). 
99-194 O - 03 - 24 : QL 3 Part 3 
116 STAT. 2330 
PUBLIC LAW 107-297—NOV. 26, 2002 
(B) No MANDATORY RECOUPMENT IF UNCOMPENSATED 
LOSSES EXCEED INSURANCE MARKETPLACE RETENTION.—^Not-
withstanding subparagraph (A), if the aggregate amount 
of uncompensated insured losses referred to in clause (ii) 
of such subparagraph for any period referred to in subpara-
graph (A), (B), or (C) of paragraph (6) is greater than 
the insurance marketplace aggregate retention amount 
under paragraph (6) for such period, the mandatory 
recoupment amount shall be $0. 
(C) MANDATORY ESTABLISHMENT OF SURCHARGES TO 
RECOUP MANDATORY RECOUPMENT AMOUNT.—^The Secretary 
shall collect, for repa5niient of the Federal financial assist-
ance provided in connection with all acts of terrorism (or 
acts of war, in the case of workers compensation) occurring 
during any of the periods referred to in subparagraph 
(A), (B), or (C) of paragraph (6), terrorism loss risk-
spreading premiums in an amount equal to any mandatory 
recoupment amount for such period. 
(D) 
DISCRETIONARY RECOUPMENT OF REMAINDER OF 
FINANCIAL ASSISTANCE.—To the extent that the amount 
of Federal financial assistance provided exceeds any 
mandatory recoupment amount, the Secretary may recoup, 
through terrorism loss risk-spreading premiums, such addi-
tional amounts that the Secretary believes can be recouped, 
based on— 
(i) the ultimate costs to taxpayers of no additional 
recoupment; 
(ii) the economic conditions in the commercial 
marketplace, including the capitalization, profitability, 
and investment returns of the insurance industry and 
the current cycle of the insurance markets; 
(iii) the affordability of commercial insurance for 
smsdl- and medium-sized businesses; and 
(iv) such other factors as the Secretary considers 
appropriate. 
(8) POLICY SURCHARGE FOR TERRORISM LOSS RISK-SPREADING 
PREMIUMS.— 
(A) POLICYHOLDER PREMiUM.^Any amount established 
by the Secretary as a terrorism loss risk-spreading pre-
mium shall— 
(i) be imposed as a policyholder premium sur-
charge on property and casualty insurance 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 property and casualty 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 terrorism loss risk-
spreading premium (including any additional amount 
included in such premium on a discretionary basis pursuant 
to paragraph (7)(D)) may not exceed, on an annual basis, 
the amount equal to 3 percent of the premium charged 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2331 
for property and casualty insurance coverage under the 
policy. 
(D) ADJUSTMENT FOR URBAN AND SMALLER COMMERCIAL 
AND RURAL AREAS AND DIFFERENT LINES OF INSURANCE.— 
(i) ADJUSTMENTS.—In determining the method and 
manner of imposing terrorism loss risk-spreading pre-
miums, including the amount of such premiums, the 
Secretary shall take into consideration— 
(I) the economic impact on commercial centers 
of urban areas, including the effect on commercial 
rents 
and commercial 
insurance 
premiums, 
particularly rents and premiums charged to small 
businesses, and the availability of lease space and 
commercial insurance within urban areas; 
(II) the risk factors related to rural areas and 
smaller commercial centers, including the potential 
exposure 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 insurance. 
(ii) RECOUPMENT OF ADJUSTMENTS.—^Any manda-
tory recoupment amounts not collected by the Secretary 
because of adjustments under this subparagraph shall 
be recouped 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 policies that are not based on a calendar year, 
or to apply such provisions on a daily, monthly, or quarterly 
basis, as appropriate. 
(f) CAPTIVE INSURERS AND OTHER SELF-INSURANCE ARRANGE-
MENTS.—^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 obtaining reinsurance coverage 
for insurer deductibles or insured losses retained by insurers 
pursuant to this section, nor shall the obtaining of such cov-
erage affect the calculation of such deductibles or retentions. 
(2) LIMITATION ON FINANCIAL ASSISTANCE.—^The amount 
of financial assistance provided pursuant to this section 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 Transi-
tion Period or a Program Year provided pursuant to this section, 
may not exceed the aggregate amount of the insurer's insured 
116 STAT. 2332 
PUBLIC LAW 107-297—NOV. 26, 2002 
Deadline. 
Regulations. 
losses for such period. If such recoveries and financial assist-
ance for the Transition Period or a Program Year exceed such 
aggregate amount of insured losses for that period and there 
is no agreement between the insurer and any reinsurer to 
the contrary, an amount in excess of such aggregate insured 
losses shall be returned to the Secretary, 
(h) GROUP LIFE INSURANCE STUDY.— 
(1) STUDY.—^The Secretary shall study, on an expedited 
basis, whether adequate and affordable catastrophe reinsurance 
for acts of terrorism is available to life insurers in the United 
States that issue group life insurance, and the extent to which 
the threat of terrorism is reducing the availability of group 
life insurance coverage for consumers in the United States. 
(2) CONDITIONAL COVERAGE.—To the extent that the Sec-
retary determines that such coverage is not or will not be 
reasonably available to both such insurers and consumers, the 
Secretary shall, in consultation with the NAIC— 
(A) apply the provisions of this title, as appropriate, 
to providers of group life insurance; and 
(B) provide such restrictions, limitations, or conditions 
with respect to any financial assistance provided that the 
Secretary deems appropriate, based on the study under 
paragraph (1). 
(i) STUDY AND REPORT.— 
(1) STUDY.—^The Secretary, after consultation with the 
NAIC, representatives of the insurance industry, and other 
experts in the insurance field, shall conduct a study of the 
potential effects of acts of terrorism on the availability of life 
insurance and other lines of insurance coverage, including per-
sonal lines. 
(2) REPORT.—Not later than 9 months after the date of 
enactment of this Act, the Secretary shall submit a report 
to the Congress on the results of the study conducted under 
paragraph (1). 
SEC. 104. GENERAL AUTHORITY AND ADMINISTRATION OF CLAIMS. 
(a) GENERAL AUTHORITY.—^The Secretary shall have the powers 
and authorities necessary to carry out the Program, 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 entities that participate in the 
Program are treated comparably under the Program. 
(b) INTERIM RULES AND PROCEDURES.—The Secretary may issue 
interim final rules or procedures specifying the manner in which— 
(1) insurers may file and certify claims under the Program; 
(2) the Federal share of compensation for insured losses 
will be paid under the Program, including payments based 
on estimates of or actual insured losses; 
(3) the Secretary may, at any time, seek repayment from 
or reimburse any insurer, based on estimates of insured losses 
under the Program, to effectuate the insured loss sharing provi-
sions in section 103; and 
(4) the Secretary will determine any final netting of pay-
ments under the Program, including payments owed to the 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2333 
Federal Government from any insurer and any Federal share 
of compensation for insured losses owed to any insurer, to 
effectuate the insured loss sharing provisions in section 103. 
(c) CONSULTATION.—The Secretary shall consult with the NAIC, 
as the Secretary determines appropriate, concerning the Program. 
(d) CONTRACTS FOR SERVICES.—^The Secretary may employ per-
sons or contract for services as may be necessary to implement 
the Program. 
(e) CIVIL PENALTIES.— 
(1) IN GENERAL.—^The Secretary may assess a civil mone-
tary penalty in an amount not exceeding the amount under 
paragraph (2) against any insurer that the Secretary deter-
mines, on the record after opportunity for a hearing— 
(A) has failed to charge, collect, or remit terrorism 
loss risk-spreading premiums under section 103(e) in 
accordance with the requirements of, or regulations issued 
under, this title; 
(B) has intentionally provided to the Secretary erro-
neous information regarding premium or loss amounts; 
(C) submits to the Secretary fraudulent claims under 
the Program for insured losses; 
(D) has failed to provide the disclosures required under 
subsection (f); or 
(E) has otherwise failed to comply with the provisions 
of, or the regulations issued under, this title. 
(2) AMOUNT.—^The amount under this paragraph is the 
greater of $1,000,000 and, in the case of any failure to pay, 
charge, collect, or remit amounts in accordance with this title 
or the regulations issued under this title, such amount in 
dispute. 
(3) RECOVERY OF AMOUNT IN DISPUTE.—^A penalty under 
this subsection for any failure to pay, charge, collect, or remit 
amounts in accordance with this title or the regulations under 
this title shall be in addition to any such amounts recovered 
by the Secretary. 
(f) SUBMISSION OF PREMIUM INFORMATION.— 
(1) IN GENERAL.—^The Secretary shall annually compile 
information on the terrorism risk insurance premium rates 
of insurers for the preceding year. 
(2) ACCESS TO INFORMATION.—^To the extent that such 
information is not otherwise available to the Secretary, the 
Secretary may require each insurer to submit to the NAIC 
terrorism risk insurance premium rates, as necessary to carry 
out paragraph (1), and the NAIC shall make such information 
available to the Secretary. 
(3) AVAILABILITY TO CONGRESS.—^The Secretary shall make 
information compiled under this subsection available to the 
Congress, upon request. 
(g) FUNDING.— 
(1) FEDERAL PAYMENTS.—There are hereby appropriated, 
out of funds in the Treasury not otherwise appropriated, such 
sums as may be necessary to pay the Federal share of com-
pensation for insured losses under the Program. 
(2) ADMINISTRATIVE EXPENSES.—There are hereby appro-
priated, out of funds in the Treasury not otherwise appro-
priated, such sums as may be necessary to pay reasonable 
costs of administering the Program. 
116 STAT. 2334 
PUBLIC LAW 107-297—NOV. 26, 2002 
SEC. 105. PREEMPTION AND NULLIFICATION OF PRE-EXISTING TER-
RORISM EXCLUSIONS. 
(a) GENERAL NULLIFICATION.—^Any terrorism exclusion in a con-
tract for property and casualty insurance that is in force on the 
date of enactment of this Act shall be void to the extent that 
it excludes losses that would otherwise be insured losses. 
(b) GENERAL PREEMPTION.—^Aay State approval of any ter-
rorism exclusion from a contract for property and casualty insurance 
that is in force on the date of enactment of this Act, shall be 
void to the extent that it excludes losses that would otherwise 
be insured losses. 
(c) REINSTATEMENT OF TERRORISM EXCLUSIONS.—^Notwith-
standing subsections (a) and (b) or any provision of State law, 
an insurer may reinstate a preexisting provision in a contract 
for property and casualty insurance that is in force on the date 
of enactment of this Act and that excludes coverage for an act 
of terrorism only— 
(1) if the insurer has received a written statement from 
the insured that affirmatively authorizes such reinstatement; 
or 
(2) if— 
(A) the insured fails to pay any increased premium 
charged by the insurer for providing such terrorism cov-
erage; and 
(B) the insurer provided notice, at least 30 days before 
any such reinstatement, of— 
(i) the increased premium for such terrorism cov-
erage; and 
(ii) the rights of the insured with respect to such 
coverage, including any date upon which the exclusion 
would be reinstated if no pa5mfient is received. 
SEC. 106. PRESERVATION PROVISIONS. 
(a) STATE LAW.—^Nothing in this title shall affect the jurisdic-
tion or regulatory authority of the insurance commissioner (or any 
agency or office performing like functions) of any State over any 
insurer or other person— 
(1) except as specifically provided in this title; and 
(2) except that— 
(A) the definition of the term "act of terrorism" in 
section 102 shall be the exclusive definition of that term 
for purposes of compensation for insured losses under this 
title, and shall preempt any provision of State law that 
is inconsistent with that definition, to the extent that such 
provision of law would otherwise apply to any t5T)e of 
insurance covered by this title; 
(B) during the period beginning on the date of enact-
ment of this Act and ending on December 31, 2003, rates 
and forms for terrorism risk insurance covered by this 
title and filed with any State shall not be subject to prior 
approval or a waiting period under any law of a State 
that would otherwise be applicable, except that nothing 
in this title affects the ability of any State to invalidate 
a rate as excessive, inadequate, or unfairly discriminatory, 
and, with respect to forms, where a State has prior approval 
authority, it shall apply to allow subsequent review of 
such forms; and 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2335 
(C) during the period beginning on the date of enact-
ment of this Act and for so long as the Program is in 
effect, as provided in section 108, including authority in 
subsection 108(b), books and records of any insurer that 
are relevant to the Program shall be provided, or caused 
to be provided, to the Secretary, upon request by the Sec-
retary, notwithstanding any provision of the laws of any 
State prohibiting or limiting such access. 
(b) EXISTING REINSURANCE AGREEMENTS.—Nothing in this title 
shall be construed to alter, amend, or expand the terms of coverage 
under any reinsurance agreement in effect on the date of enactment 
of this Act. The terms and conditions of such an agreement shall 
be determined by the language of that agreement. 
SEC. 107. LITIGATION MANAGEMENT. 
(a) PROCEDURES AND DAMAGES.— 
(1) IN GENERAL.—If the Secretary makes a determination 
pursuant to section 102 that an act of terrorism has occurred, 
there shall exist a Federal cause of action for property damage, 
personal injury, or death arising out of or resulting from such 
act of terrorism, which shall be the exclusive cause of action 
and remedy for claims for property damage, personal injury, 
or death arising out of or relating to such act of terrorism, 
except as provided in subsection (b). 
(2) PREEMPTION OF STATE ACTIONS.—All State causes of 
action of any kind for property damage, personal injury, or 
death arising out of or resulting from an act of terrorism 
that are otherwise available under State law are hereby pre-
empted, except as provided in subsection (b). 
(3) SUBSTANTIVE LAW.—^The substantive law for decision 
in any such action described in paragraph (1) shall be derived 
from the law, including choice of law principles, of the State 
in which such act of terrorism occurred, unless such law is 
otherwise inconsistent with or preempted by Federal law. 
(4) JURISDICTION.—^For each determination described in Deadline, 
paragraph (1), not later than 90 days after the occurrence 
of an act of terrorism, the Judicial Panel on Multidistrict Litiga-
tion shall designate 1 district court or, if necessary, multiple 
district courts of the United States that shall have original 
and exclusive jurisdiction over all actions for any claim 
(including any claim for loss of property, personal injury, or 
death) relating to or arising out of an act of terrorism subject 
to this section. The Judicial Panel on Multidistrict Litigation 
shall select and assign the district court or courts based on 
the convenience of the parties and the just and efficient conduct 
of the proceedings. For purposes of personal jurisdiction, the 
district court or courts designated by the Judicial Panel on 
Multidistrict Litigation shall be deemed to sit in all judicial 
districts in the United States. 
(5) PUNITIVE DAMAGES.—^Any amounts awarded in an action 
under paragraph (1) that are attributable to punitive damages 
shall not count as insured losses for purposes of this title. 
(b) EXCLUSION.—^Nothing in this section shall in any way limit 
the liability of any government, an organization, or person who 
knowingly participates in, conspires to commit, aids and abets, 
or commits any act of terrorism with respect to which a determina-
tion described in subsection (a)(1) was made. 
116 STAT. 2336 
PUBLIC LAW 107-297—NOV. 26, 2002 
(c) EIGHT OF SUBROGATION.—^The United States shall have 
the right of subrogation with respect to any pa3nnent or claim 
paid by the United States under this title. 
(d) RELATIONSHIP TO OTHER LAW.—Nothing in this section shall 
be construed to affect— 
(1) any party's contractual right to arbitrate a dispute; 
or 
(2) any provision of the Air Transportation Safety and 
System StabiHzation Act (Public Law 107-42; 49 U.S.C. 40101 
note.). 
Applicability. 
(e) EFFECTIVE PERIOD.—^This section shall apply only to actions 
described in subsection (a)(1) that arise out of or result from acts 
of terrorism that occur or occurred during the effective period of 
the Program. 
SEC. 108. TERMINATION OF PROGRAM. 
(a) TERMINATION OF PROGRAM.—^The Program shall terminate 
on December 31, 2005. 
(b) CONTINUING AUTHORITY TO PAY OR ADJUST COMPENSA-
TION.—^Following the termination of the Program, the Secretary 
may take such actions as may be necessary to ensure payment, 
recoupment, reimbursement, or adjustment of compensation for 
insured losses arising out of any act of terrorism occurring during 
the period in which the Program was in effect under this title, 
in accordance with the provisions of section 103 and regulations 
promulgated thereunder. 
(c) REPEAL; SAVINGS CLAUSE.—This title is repealed on the 
final termination date of the Program under subsection (a), except 
that such repeal shall not be construed— 
(1) to prevent the Secretary from taking, or causing to 
be taken, such actions under subsection (b) of this section, 
paragraph (4), (5), (6), (7), or (8) of section 103(e), or subsection 
(a)(1), (c), (d), or (e) of section 104, as in effect on the day 
before the date of such repeal, or applicable regulations promul-
gated thereunder, during any period in which the authority 
of the Secretary under subsection (b) of this section is in effect; 
or 
(2) to prevent the availability of funding under section 
104(g) during any period in which the authority of the Secretary 
under subsection (b) of this section is in effect. 
(d) STUDY AND REPORT ON THE PROGRAM.— 
(1) STUDY.—The Secretary, in consultation with the NAIC, 
representatives of the insurance industry and of policy holders, 
other experts in the insurance field, and other experts as 
needed, shall assess the effectiveness of the Program and the 
likely capacity of the property and casualty insurance industry 
to offer insurance for terrorism risk after termination of the 
Program, and the availability and affordability of such insur-
ance for various policyholders, including railroads, trucking, 
and public transit. 
Deadline. 
(2) REPORT.—^The Secretary shall submit a report to the 
Congress on the results of the study conducted under paragraph 
(1) not later than June 30, 2005. 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2337 
TITLE II—TREATMENT OF TERRORIST 
ASSETS 
SEC. 201. SATISFACTION OF JUDGMENTS FROM BLOCKED ASSETS OF 
TERRORISTS, TERRORIST ORGANIZATIONS, AND STATE 
SPONSORS OF TERRORISM. 
(a) IN GENERAL.—^Notwithstanding any other provision of law, 
28 USC 1610 
and except as provided in subsection (b), in every case in which note. 
a person has obtained a judgment against a terrorist party on 
a claim based upon an act of terrorism, or for which a terrorist 
party is not immune under section 1605(a)(7) of title 28, United 
States Code, the blocked assets of that terrorist party (including 
the blocked assets of any agency or instrumentality of that terrorist 
party) shall be subject to execution or attachment in aid of execution 
in order to satisfy such judgment to the extent of any compensatory 
damages for which such terrorist party has been adjudged liable. 
(b) PRESIDENTIAL WAIVER.— 
28 use leio 
(1) IN GENERAL.—Subject to paragraph (2), upon deter- note. 
mining on an asset-by-asset basis that a waiver is necessary 
in the national security interest, the President may waive the 
requirements of subsection (a) in connection with (and prior 
to the enforcement of) any judicial order directing attachment 
in aid of execution or execution against any property subject 
to the Vienna Convention on Diplomatic Relations or the Vienna 
Convention on Consular Relations. 
(2) EXCEPTION.—^A waiver under this subsection shall not 
apply to— 
(A) property subject to the Vienna Convention on Diplo-
matic Relations or the Vienna Convention on Consular 
Relations that has been used by the United States for 
any nondiplomatic purpose (including use as rental prop-
erty), or the proceeds of such use; or 
(B) the proceeds of any sale or transfer for value to 
a third party of any asset subject to the Vienna Convention 
on Diplomatic Relations or the Vienna Convention on Con-
sular Relations. 
(c) SPECIAL RULE FOR CASES AGAINST IRAN.—Section 2002 of 
the Victims of Trafficking and Violence Protection Act of 2000 
(PubHc Law 106-386; 114 Stat. 1542), as amended by section 686 
of Public Law 107-228, is further amended— 
Ante, p. 1411. 
(1) in subsection (a)(2)(A)(ii), by striking "July 27, 2000, 
or January 16, 2002" and inserting "July 27, 2000, any other 
date before October 28, 2000, or January 16, 2002"; 
(2) in subsection (b)(2)(B), by inserting after "the date 
of enactment of this Act" the following: "(less amounts therein 
as to which the United States has an interest in subrogation 
pursuant to subsection (c) arising prior to the date of entry 
of the judgment or judgments to be satisfied in whole or in 
part hereunder)"; 
(3) by redesignating subsections (d), (e), and (f) as sub- 
28 USC 1606, 
sections (e), (f), and (g), respectively; and 
1610 and note. 
(4) by inserting after subsection (c) the following new sub-
section (d): 
"(d) DISTRIBUTION OF ACCOUNT BALANCES AND PROCEEDS INAD-
EQUATE TO SATISFY FULL AMOUNT OF COMPENSATORY AWARDS 
AGAINST IRAN.— 
116 STAT. 2338 
PUBLIC LAW 107-297—NOV. 26, 2002 
Deadline. 
"(1) PRIOR JUDGMENTS.— 
"(A) IN GENERAL.—In the event that the Secretary 
determines that 90 percent of the amounts available to 
be paid under subsection (b)(2) are inadequate to pay the 
total amount of compensatory damages awarded in judg-
ments issued as of the date of the enactment of this sub-
section in cases identified in subsection (a)(2)(A) with 
respect to Iran, the Secretary shall, not later than 60 
days after such date, make payment from such amounts 
available to be paid under subsection (b)(2) to each party 
to which such a judgment has been issued in an amount 
equal to a share, calculated under subparagraph (B), of 
90 percent of the amounts available to be paid under sub-
section (b)(2) that have not been subrogated to the United 
States under this Act as of the date of enactment of this 
subsection. 
"(B) CALCULATION OF PAYMENTS.—The share that is 
payable to a person under subparagraph (A), including 
any person issued a final judgment as of the date of enact-
ment of this subsection in a suit filed on a date added 
by the amendment made by section 686 of Public Law 
107-228, shall be equal to the proportion that the amount 
of unpaid compensatory damages awarded in a final judg-
ment issued to that person bears to the total amount of 
all unpaid compensatory damages awarded to all persons 
to whom such judgments have been issued as of the date 
of enactment of this subsection in cases identified in sub-
section (a)(2)(A) with respect to Iran. 
"(2) SUBSEQUENT JUDGMENT.— 
"(A) IN GENERAL.—^The Secretary shall pay to any per-
son awarded a final judgment after the date of enactment 
of this subsection, in the case filed on January 16, 2002, 
and identified in subsection (a)(2)(A) with respect to Iran, 
an amount equal to a share, calculated under subparagraph 
(B), of the balance of the amounts available to be paid 
under subsection (b)(2) that remain following the disburse-
ment of all pa3mients as provided by paragraph (1). The 
Secretary shall make such payment not later than 30 days 
after such judgment is awarded. 
"(B) CALCULATION OF PAYMENTS.—To the extent that 
funds are available, the amount paid under subparagraph 
(A) to such person shall be the amount the person would 
have been paid under paragraph (1) if the person had 
been awarded the judgment prior to the date of enactment 
of this subsection. 
"(3) ADDITIONAL PAYMENTS.— 
"(A) IN GENERAL.—Not later than 30 days after the 
disbursement of all payments under paragraphs (1) and 
(2), the Secretary shall make an additional payment to 
each person who received a payment under paragraph (1) 
or (2) in an amount equal to a share, calculated under 
subparagraph (B), of the balance of the amounts available 
to be paid under subsection (b)(2) that remain following 
the disbursement of all payments as provided by para-
graphs (1) and (2). 
"(B) CALCULATION OF PAYMENTS.—^The share payable 
under subparagraph (A) to each such person shall be equal 
PUBLIC LAW 107-297—NOV. 26, 2002 
116 STAT. 2339 
to the proportion that the amount of compensatory damages 
awarded that person bears to the total amount of all 
compensatory damages awarded to all persons who received 
a payment under paragraph (1) or (2). 
"(4) STATUTORY CONSTRUCTION.—Nothing in this subsection 
shall bar, or require delay in, enforcement of any judgment 
to which this subsection applies under any procedure or against 
assets otherwise available under this section or under any 
other provision of law. 
"(5) CERTAIN RIGHTS AND CLAIMS NOT RELINQUISHED.—^Any 
person receiving less than the full amount of compensatory 
damages awarded to that party in a judgment to which this 
subsection applies shall not be required to make the election 
set forth in subsection (a)(2)(B) or, with respect to subsection 
(a)(2)(D), the election relating to relinquishment of any right 
to execute or attach property that is subject to section 
1610(f)(1)(A) of title 28, United States Code, except that such 
person shall be required to relinquish rights set forth— 
"(A) in subsection (a)(2)(C); and 
"(B) in subsection (a)(2)(D) with respect to enforcement 
against property that is at issue in claims against the 
United States before an international tribunal or that is 
the subject of awards by such tribunal. 
"(6) GUIDELINES FOR ESTABLISHING CLAIMS OF A RIGHT TO 
PAYMENT.—^The Secretary may promulgate reasonable guide-
lines through which any person claiming a right to payment 
under this section may inform the Secretary of the basis for 
such claim, including by submitting a certified copy of the 
final judgment under which such right is claimed and by pro-
viding commercially reasonable pa5niient instructions. The Sec-
retary shall take all reasonable steps necessary to ensure, 
to the maximum extent practicable, that such guidelines shall 
not operate to delay or interfere with payment under this 
section.". 
(d) DEFINITIONS.—In this section, the following definitions shall 
28 use 1610 
apply: 
(1) ACT OF TERRORISM.—The term "act of terrorism" 
means— 
(A) any act or event certified under section 102(1); 
or 
(B) to the extent not covered by subparagraph (A), 
any terrorist activity (as defined in section 212(a)(3)(B)(iii) 
of the 
Immigration 
and 
Nationality Act 
(8 U.S.C. 
1182(a)(3)(B)(iii))). 
(2) BLOCKED ASSET.—^The term "blocked asset" means— 
(A) any asset seized or frozen by the United States 
under section 5(b) of the Trading With the Enemy Act 
(50 U.S.C. App. 5(b)) or under sections 202 and 203 of 
the International Emergency Economic Powers Act (50 
U.S.C. 1701; 1702); and 
(B) does not include property that— 
(i) is subject to a license issued by the United 
States Government for final payment, transfer, or dis-
position by or to a person subject to the jurisdiction 
of the United States in connection with a transaction 
for which the issuance of such license has been specifi-
cally required by statute other than the International 
note. 
116 STAT. 2340 
PUBLIC LAW 107-297—NOV. 26, 2002 
Emergency Economic Powers Act (50 U.S.C. 1701 et 
seq.) or the United Nations Participation Act of 1945 
(22 U.S.C. 287 et seq.); or 
(ii) in the case of property subject to the Vienna 
Convention on Diplomatic Relations or the Vienna 
Convention on Consular Relations, or that enjoys 
equivalent privileges and immunities under the law 
of the United States, is being used exclusively for 
diplomatic or consular purposes. 
(3) CERTAIN PROPERTY.—^The term "property subject to the 
Vienna Convention on Diplomatic Relations or the Vienna 
Convention on Consular Relations" and the term "asset subject 
to the Vienna Convention on Diplomatic Relations or the Vienna 
Convention on Consular Relations" mean any property or asset, 
respectively, the attachment in aid of execution or execution 
of which would result in a violation of an obligation of the 
United States under the Vienna Convention on Diplomatic Rela-
tions or the Vienna Convention on Consular Relations, as the 
case may be. 
(4) TERRORIST PARTY.—The term "terrorist party" means 
a terrorist, a terrorist organization (as defined in section 
212(a)(3)(B)(vi) of the Immigration and NationaUty Act (8 
U.S.C. 1182(a)(3)(B)(vi))), or a foreign state designated as a 
state sponsor of terrorism under section 6(j) of the Export 
Administration Act of 1979 (50 U.S.C. App. 24050')) or section 
620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371). 
TITLE III—FEDERAL RESERVE BOARD 
PROVISIONS 
SEC. 
301. CERTAIN 
AUTHORITY 
OF 
THE 
BOARD OF 
GOVERNORS OF 
THE 
FEDERAL 
RESERVE 
SYSTEM. 
Section 11 of the Federal Reserve Act (12 U.S.C. 248) is 
amended by adding at the end the following new subsection: 
"(r)(l) Any action that this Act provides may be taken only 
upon the affirmative vote of 5 members of the Board may be 
taken upon the unanimous vote of all members then in office 
if there are fewer than 5 members in office at the time of the 
action. 
"(2)(A) Any action that the Board is otherwise authorized to 
take under section 13(3) may be taken upon the unanimous vote 
of all available members then in office, if— 
"(i) at least 2 members are available and all available 
members participate in the action; 
"(ii) the available members unanimously determine that— 
"(I) unusual and exigent circumstances exist and the 
borrower is unable to secure adequate credit accommoda-
tions from other sources; 
"(II) action on the matter is necessary to prevent, cor-
rect, or mitigate serious harm to the economy or the sta-
bility of the financial system of the United States; 
"(III) despite the use of all means available (including 
all available telephonic, telegraphic, and other electronic 
means), the other members of the Board have not been 
able to be contacted on the matter; and 
PUBLIC LAW 107-297-NOV. 26, 2002 
116 STAT. 2341 
"(IV) action on the matter is required before the num-
ber of Board members otherwise required to vote on the 
matter can be contacted through any available means 
(including all available telephonic, telegraphic, and other 
electronic means); and 
"(iii) any credit extended by a Federal reserve bank pursu-
ant to such action is payable upon demand of the Board. 
"(B) The available members of the Board shall document in Records. 
writing the determinations required by subparagraph (A)(ii), and 
such written findings shall be included in the record of the action 
and in the official minutes of the Board, and copies of such record 
shall be provided as soon as practicable to the members of the 
Board who were not available to participate in the action and 
to the Chairman of the Committee on Banking, Housing, and Urban 
Affairs of the Senate and to the Chairman of the Committee on 
Financial Services of the House of Representatives.". 
Approved November 26, 2002. 
LEGISLATIVE HISTORY-H.R. 3210 (S. 2600): 
HOUSE REPORTS: Nos. 107-300, Pt. 1 (Comm. on Financial Services) and Pt. 2 
(Comm. on Ways and Means) and 107-779 (Comm. of Con-
ference). 
CONGRESSIONAL RECORD: 
Vol. 147 (2001): Nov. 29, considered and passed House. 
Vol. 148 (2002): July 25, considered and passed Senate, amended, in lieu of 
S. 2600. 
Nov. 14, House agreed to conference report. 
Nov. 19, Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 38 (2002): 
Nov. 26, Presidential remarks.