[DOCID: f:hr475.110]
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110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-475
======================================================================
PROVIDING FOR THE CONSIDERATION OF THE SENATE AMENDMENT TO THE BILL
(H.R. 2761) TO EXTEND THE TERRORISM INSURANCE PROGRAM OF THE DEPARTMENT
OF THE TREASURY, AND FOR OTHER PURPOSES
_______
December 6, 2007.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Arcuri, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 849]
The Committee on Rules, having had under consideration
House Resolution 849, by a non-record vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for the consideration of the Senate
amendment to H.R. 2761, the Terrorism Risk Insurance Revision
and Extension Act of 2007. The resolution makes in order a
motion by the Chairman of the Committee on Financial Services
to concur in the Senate amendment with the House amendment
printed in this report. The resolution waives all points of
order against the motion except clause 10 of rule XXI. The
resolution provides that the Senate amendment and the motion
shall be considered as read. The resolution provides one hour
of debate on the motion equally divided and controlled by the
chairman and ranking minority member of the Committee on
Financial Services. The resolution further provides that the
Chair may postpone further consideration of the motion to a
time designated by the Speaker.
EXPLANATION OF WAIVERS
Although the rule waives all points of order against
consideration of the motion (except for clause 10 of rule XXI)
the Committee is not aware of any points of order against the
motion. The waiver of all points of order against the motion is
prophylactic in nature.
SUMMARY OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TO H.R. 2761
The amendment incorporates the entirety of the Senate
amendment to H.R. 2761, and adds certain provisions from the
original House-passed H.R. 2761.
The amendment adds group life to TRIA's covered lines, and
creates a separate $5 billion recoupment pool for group life.
Property and casualty insurance would retain its separate $27.5
billion recoupment pool. The amendment also caps the level of
Federal exposure at $1 million per certificate holder under any
group life insurance policy.
The amendment provides that for an act of terrorism
resulting in aggregate industry insured losses exceeding $1
billion, the deductible that would apply to insurers affected
by that particular $1 billion or greater act of terrorism
decreases to the following percentage: 5% if such act occurs in
2008, 5.5% if such act occurs in 2009, and increasing by 50
basis points each additional Program Year. However, such
percentage will reset to 5% in the Program Year following a $1
billion or greater act of terrorism, and start increasing again
by 50 basis points each subsequent additional Program Year. The
Secretary may combine multiple acts of terrorism in the same
Program Year in the same geographic area for determining
whether the $1 billion threshold has been exceeded. In
addition, the trigger will decrease to $5 million if a
certified act of terrorism occurs for which resulting aggregate
industry insured losses exceed $1 billion.
Also, the amendment adds other provisions including
lowering the trigger from $100 million to $50 million
generally, and clarifies that the provisions of the bill will
apply beginning on January 1, 2008.
TEXT OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TO H.R. 2761
At the end of the matter proposed to be inserted by the
amendment of the Senate, insert the following:
SEC. 6. COVERAGE OF GROUP LIFE INSURANCE.
(a) Findings and Purpose.--Section 101 of the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) in subsection (a)--
(A) in paragraph (5), by striking ``and'' at
the end;
(B) by redesignating paragraph (6) as
paragraph (8); and
(C) by inserting after paragraph (5) the
following new paragraphs:
``(6) group life insurance companies are important
financial institutions whose products make life
insurance coverage affordable for millions of Americans
and often serve as their only life insurance benefit;
``(7) the group life insurance industry, in the event
of a severe act of terrorism, is vulnerable to
insolvency because high concentrations of covered
employees work in the same locations, because primary
group life insurers do not exclude terrorism risks
while most catastrophic reinsurance does exclude such
risks, and because a large-scale loss of life would
fall outside of actuarial expectations of death; and'';
and
(2) in subsection (b)(1), by inserting ``and group
life insurance'' after ``property and casualty
insurance''.
(b) Definitions.--Section 102 of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note), as amended by the preceding
provisions of this Act, is further amended--
(1) in paragraph (1)(B)(ii), by inserting ``and group
life insurance'' before ``losses'';
(2) in paragraph (5), in the matter preceding
subparagraph (A)--
(A) by inserting ``, or group life insurance
to the extent of the amount at risk,'' after
``property and casualty insurance'';
(B) by inserting a comma after ``insurer'';
and
(C) by adding after and below subparagraph
(B) the following:
``Such term shall not include any losses of an insurer
resulting from coverage of any single certificate
holder under any group life insurance coverages of the
insurer to the extent such losses are not compensated
under the Program by reason of section 103(e)(1)(D).'';
(3) in paragraph (6)--
(A) in subparagraph (A)(i), by inserting ``,
or group life insurance,'' after ``excess
insurance''; and
(B) in subparagraph (B), by inserting ``or,
in the case of group life insurance, that
receives direct premiums,'' after ``insurance
coverage,'';
(4) in paragraph (7)--
(A) in subparagraph (F)--
(i) by striking the first comma and
inserting ``(i) with respect to
property and casualty insurance,''; and
(ii) by inserting before the
semicolon the following: ``(ii) with
respect to group life insurance, the
value of an insurer's amount at risk
for a covered line of insurance over
the calendar year immediately preceding
such Program Year, multiplied by 0.0351
percent'';'';
(B) in subparagraph (G)--
(i) by inserting ``with respect to
property and casualty insurance, and
such portion of the amounts at risk
with respect to group life insurance,''
after ``such portion of the direct
earned premiums''; and
(ii) by inserting ``and amounts at
risk'' after ``such direct earned
premiums'';
(5) by redesignating paragraph (16) as paragraph
(18); and
(6) by inserting after paragraph (15) the following
new paragraphs:
``(16) 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 coverage, 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.
``(17) Amount at risk.--The term `amount at risk'
means face amount less statutory policy reserves for
group life insurance issued by any insurer for
insurance against losses occurring at the locations
described in subparagraph (A) of paragraph (5).''.
(c) Mandatory Availability.--Section 103(c) of the Terrorism
Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is amended by
striking ``During each Program Year'' and all that follows
through ``property and casualty insurance'' in paragraph (2)
and inserting the following:
``(1) Availability of coverage for insured losses.--
During each Program Year, each entity that meets the
definition of an insurer under section 102 shall make
available, in all of its insurance policies for
property and casualty insurance and in all of its
insurance policies for group life insurance,''.
(d) Federal Share of Compensation.--Section 103(e)(1) of the
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is
amended by adding at the end the following new subparagraph:
``(D) Limitation on compensation for group
life insurance.--Notwithstanding any other
provision of this Act, the Federal share of
compensation under the Program paid by the
Secretary for insured losses of an insurer
resulting from coverage of any single
certificate holder under any group life
insurance coverages of the insurer may not
during any Program Year exceed $1,000,000.''.
(e) Separate Retention Pool.--Section 103(e)(6)(E) of the
Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 note) is
amended by striking clauses (i) and (ii) and inserting the
following new clauses:
``(i) for property and casualty
insurance, the lesser of--
``(I) $27,500,000,000; and
``(II) the aggregate amount,
for all such insurance, of
insured losses during such
Program Year; and
``(ii) for group life insurance, the
lesser of--
``(I) $5,000,000,000; and
``(II) the aggregate amount,
for all such insurance, of
insured losses during such
Program Year.''.
(f) Separate Recoupment.--Section 103(e)(7) of the Terrorism
Risk Insurance Act of 2002 (15 U.S.C. 6701 note), as amended by
the preceding provisions of this Act, is further amended--
(1) in subparagraph (A)--
(A) in clause (i), by inserting
``applicable'' before ``insurance''; and
(B) in clause (ii), by striking ``all
insurers'' and inserting ``all applicable
insurers (pursuant to subparagraph (G))'';
(2) in subparagraph (B)--
(A) in the heading, by inserting
``applicable'' before ``insurance''; and
(B) by inserting ``applicable'' before
``insurance''; and
(3) by adding at the end the following new
subparagraph:
``(G) Separate recoupment.--``The Secretary
shall provide that--
``(i) any recoupment under this
paragraph of amounts paid for Federal
financial assistance for insured losses
for property and casualty insurance
shall be applied to property and
casualty insurance policies; and
``(ii) any recoupment under this
paragraph of amounts paid for Federal
financial assistance for insured losses
for group life insurance shall be
applied to group life insurance
policies.''.
(g) Policy Surcharge for Terrorism Loss Risk-Spreading
Premiums.--Section 103(e)(8) of the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by
striking ``Any'' and inserting ``Subject to
paragraph (7)(G), any'';
(B) in clause (i), by inserting ``and group
life insurance policies'' after ``policies'';
and
(C) by striking clause (iii) and inserting
the following new clause:
``(iii) be based on--
``(I) a percentage of the
premium amount charged for
property and casualty insurance
coverage under the policy; and
``(II) a percentage of the
amount at risk for group life
insurance coverage under the
policy.''; and
(2) in subparagraph (C)--
(A) by inserting ``with respect to property
and casualty insurance,'' after ``annual
basis,''; and
(B) by inserting before the period at the end
the following: ``and, with respect to group
life insurance, the amount equal to 0.0053
percent of the amount at risk for covered lines
under the policy''.
SEC. 7. LARGE EVENT RESET.
The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) is amended--
(1) in section 102(7)--
(A) in subparagraph (F), by striking ``and''
at the end;
(B) in subparagraph (G), by striking the
period at the end and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(H) notwithstanding subparagraph (F)(i), if
aggregate industry insured losses resulting
from a certified act of terrorism exceed
$1,000,000,000, for any insurer that sustains
insured losses resulting from such act of
terrorism, the value of such insurer's direct
earned premiums over the calendar year
immediately preceding the Program Year,
multiplied by a percentage, which--
``(i) for the Program Year consisting
of calendar year 2008 shall be 5
percent; and
``(ii) for each Program Year
thereafter, shall be 50 basis points
greater than the percentage applicable
to the preceding Program Year, except
that if an act of terrorism occurs
during any such Program Year that
results in aggregate industry insured
losses exceeding $1,000,000,000, the
percentage for the succeeding Program
Year shall be 5 percent and the
increase under this clause shall apply
to Program Years thereafter;
except that for purposes of determining under
this subparagraph whether aggregate industry
insured losses exceed $1,000,000,000, the
Secretary may combine insured losses resulting
from two or more certified acts of terrorism
occurring during such Program Year in the same
geographic area (with such area determined by
the Secretary), in which case such insurer
shall be permitted to combine insured losses
resulting from such acts of terrorism for
purposes of satisfying its insurer deductible
under this subparagraph; and except that the
insurer deductible under this subparagraph
shall apply only with respect to compensation
of insured losses resulting from such certified
act, or combined certified acts, and that for
purposes of compensation of any other insured
losses occurring in the same Program Year, the
insurer deductible determined under
subparagraph (F)(i) shall apply.''; and
(2) in section 103(e)(1)(B)--
(A) in clause (ii), by striking the period at
the end and inserting a semicolon; and
(B) by adding after and below clause (ii) the
following:
``except that if a certified act of terrorism
occurs for which resulting aggregate industry
insured losses exceed $1,000,000,000, the
applicable amount for any subsequent certified
act of terrorism shall be the amount specified
in section 102(1)(B)(ii).''.
SEC. 8. AVAILABILITY OF LIFE INSURANCE WITHOUT REGARD TO LAWFUL FOREIGN
TRAVEL.
Section 103(c) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note), as amended by the preceding provisions
of this Act, is further amended by adding at the end the
following new paragraph:
``(2) Availability of life insurance without regard
to lawful foreign travel.--During each Program Year,
each entity that meets the definition of an insurer
under section 102 and any other entity that issues
insurance contracts that provide life insurance
coverage shall make available, in all of its life
insurance policies issued after the date of the
enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2007 under which the insured
person is a citizen of the United States or an alien
lawfully admitted for permanent residence in the United
States, coverage that neither considers past, nor
precludes future, lawful foreign travel by the person
insured, and shall not decline such coverage based on
past or future, lawful foreign travel by the person
insured or charge a premium for such coverage that is
excessive and not based on a good faith actuarial
analysis, except that an insurer may decline or, upon
inception or renewal of a policy, limit the amount of
coverage provided under any life insurance policy based
on plans to engage in future lawful foreign travel to
occur within 12 months of such inception or renewal of
the policy but only if, at time of application--
``(A) such declination is based on, or such
limitation applies only with respect to, travel
to a foreign destination--
``(i) for which the Director of the
Centers for Disease Control and
Prevention of the Department of Health
and Human Services has issued a highest
level alert or warning, including a
recommendation against non-essential
travel, due to a serious health-related
condition;
``(ii) in which there is an ongoing
military conflict involving the armed
forces of a sovereign nation other than
the foreign destination to which the
insured person is traveling; or
``(iii)(I) that the insurer has
specifically designated in the terms of
the life insurance policy at the
inception of the policy or at renewal,
as applicable; and
``(II) with respect to which the
insurer has made a good-faith
determination that--
``(aa) a serious fraudulent
situation exists which is
ongoing; and
``(bb) the credibility of
information by which the
insurer can verify the death of
the insured person is
substantially compromised; and
``(B) in the case of any limitation of
coverage, such limitation is specifically
stated in the terms of the life insurance
policy at the inception of the policy or at
renewal, as applicable.''.
SEC. 9. PROGRAM TRIGGER.
Section 103(e)(1)(B)(ii) of the Terrorism Risk Insurance Act
of 2002 (15 U.S.C. 6701 note) is amended by striking
``$100,000,000'' and inserting ``$50,000,000''.
SEC. 10. APPLICABILITY.
The amendments made by this Act shall apply beginning 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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