Terrorism Risk Insurance Legislation:
Issue Summary and Side-by-Side Analysis
Baird Webel
Specialist in Financial Economics
December 11, 2014
Congressional Research Service
7-5700
www.crs.gov
R43619

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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

Summary
Prior to the September 11, 2001, terrorist attacks, insurance covering terrorism losses was
normally included in commercial insurance policies without additional cost to the policyholders.
Following the attacks, this ceased to be the case as insurers and reinsurers pulled back from
offering terrorism coverage. It was feared that a lack of insurance against terrorism loss would
have a wider economic impact, particularly because insurance coverage can be a significant factor
in lending decisions.
Congress responded to the disruption in the insurance market by passing the Terrorism Risk
Insurance Act of 2002 (TRIA; P.L. 107-297). TRIA created a temporary program, expiring at the
end of 2005, to calm the insurance markets through a government reinsurance backstop sharing in
terrorism losses. The intent was that this would give the industry time to gather the data and
create the structures and capacity necessary for private insurance to cover terrorism risk. TRIA
did not require premiums to be paid for the government coverage. Instead, TRIA required private
insurers to offer commercial insurance for terrorism risk with the government then recouping
some or all federal payments under the act in the years following government coverage of insurer
losses.
Under TRIA, terrorism insurance became widely available and largely affordable, and the
insurance industry greatly expanded its financial capacity. There has been, however, little
apparent success on developing a longer-term private solution, and fears have persisted about
wider economic consequences if insurance were not available. Congress passed two extensions to
the program, in 2005 (P.L. 109-144) and 2007 (P.L. 110-160). The 2005 extension was primarily
focused on reducing the government’s upfront financial exposure under the act, whereas the 2007
extension left most of the upfront aspect of the TRIA program unchanged, while accelerating the
post-event recoupment provisions. The 2007 legislation also included the only expansion of the
TRIA program since initial enactment; it extended the program to cover any acts of terrorism, as
opposed to only foreign acts of terrorism.
The current TRIA program expires at the end of 2014. Although insurance industry capacity has
increased since 2002, terrorism is still seen by many as essentially uninsurable. Without TRIA,
the insurance industry has indicated that terrorism insurance will again become unavailable or
unaffordable and fears are again being expressed that lack of terrorism insurance may slow down
other sectors of the economy. Several bills (H.R. 508, H.R. 1945, H.R. 2146, S. 2244, and H.R.
4871) have been introduced to extend TRIA and change different aspects of the program.
This report briefly outlines the issues involved with terrorism insurance, summarizes the
extension legislation, and includes a side-by-side of the current TRIA law and the bills that have
been passed by the Senate (S. 2244), reported by the House Committee on Financial Services
(H.R. 4871), and passed by the House (S. 2244 with a substitute amendment). For more a more
in-depth treatment of the issues surrounding TRIA, please see CRS Report R42716, Terrorism
Risk Insurance: Issue Analysis and Overview of Current Program, by Baird Webel.

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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

Contents
Background ...................................................................................................................................... 1
Legislation in the 113th Congress ..................................................................................................... 2
The Terrorism Risk Insurance Act of 2002 Reauthorization Act of 2013 (H.R. 508) ............... 2
The Fostering Resilience to Terrorism Act of 2013 (H.R. 1945) .............................................. 2
Terrorism Risk Insurance Program Reauthorization Act of 2013 (H.R. 2146) ......................... 2
Terrorism Risk Insurance Program Reauthorization Act of 2014 (S. 2244) .............................. 3
Committee Consideration .................................................................................................... 3
Senate Floor Consideration ................................................................................................. 3
Administration Reaction ..................................................................................................... 4
House Floor Consideration .................................................................................................. 4
TRIA Reform Act of 2014 (H.R. 4871) ..................................................................................... 5
Committee Consideration .................................................................................................... 6

Tables
Table 1. Terrorism Risk Insurance Side-by Side: Current Law and Legislation .............................. 7

Contacts
Author Contact Information........................................................................................................... 15

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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

Background
Prior to the September 11, 2001, terrorist attacks, insurance covering terrorism losses was
normally included in general insurance policies without additional cost to the policyholders.
Following the attacks, both primary insurers and reinsurers pulled back from offering terrorism
coverage. Because insurance is required for a variety of economic transactions, particularly
borrowing for commercial development, it was feared that a lack of insurance against terrorism
loss would have a wider economic impact.
Congress responded to the disruption in the insurance market by passing the Terrorism Risk
Insurance Act of 2002 (TRIA).1 TRIA created a temporary three-year Terrorism Insurance
Program to calm the insurance markets through a government reinsurance backstop sharing in
terrorism losses. The idea was to give the private industry time to gather the data and create the
structures and capacity necessary for private insurance to cover terrorism risk. TRIA requires
insurers to offer terrorism coverage, but does not require commercial policyholders to purchase
the coverage. This program was extended in 20052 and 2007.3 In 2005, the extension legislation
focused on reducing the government’s exposure from TRIA by increasing the minimum covered
event size, increasing the insurer deductible, reducing the government share of losses, and
increasing the post-event mandatory recoupment. In 2007, the primary change was to accelerate
the after-the-fact recoupment. While the prospective government share of losses has been reduced
over time, the 2007 reauthorization also expanded the program to cover losses from acts of
domestic terrorism. The TRIA program is currently set to expire at the end of 2014, as provided
for in the 2007 extension.
The initial thresholds of the current program are as follows:
1. A terrorist act must cause $5 million in insured losses to be certified for TRIA
coverage.
2. The aggregate insured losses from a certified act of terrorism must be $100
million in a year for the government coverage to begin.
3. An individual insurer must meet a deductible of 20% of its annual premiums for
the government coverage to begin.
Once these thresholds are passed, the government covers 85% of insured losses due to terrorism
with the private insurers retaining 15% of the losses. No premiums are charged by the
government for this coverage. Instead, if the insured losses are under $27.5 billion, the Secretary
of the Treasury is required to recoup 133% of government outlays through a surcharge on
commercial property/casualty insurance policies. As insured losses rise above $27.5 billion, the
Secretary is required to recoup a reduced amount of the outlays. At some high insured loss level,
which will depend on the exact distribution of losses, the Secretary would no longer be required
to recoup outlays, but would retain the discretionary authority to do so. Under current law, all
mandatory recoupment must be completed by the end of FY2017.

1 P.L. 107-297, codified at 15 U.S.C. §6701 note.
2 P.L. 109-144.
3 P.L. 110-160.
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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

Since TRIA’s passage, private industry’s willingness and ability to cover terrorism risk have
increased. According to industry surveys, prices for terrorism coverage have generally trended
downward, and approximately 60% of commercial policyholders have purchased coverage over
the past few years.4 This relative market calm has been under the umbrella of TRIA coverage, and
it is unclear how the insurance market would react to the expiration of the federal program.
Legislation in the 113th Congress
The Terrorism Risk Insurance Act of 2002 Reauthorization Act of
2013 (H.R. 508)
Representative Michael Grimm along with nine cosponsors introduced H.R. 508 on February 5,
2013. The bill is a reauthorization of the existing TRIA program that would extend the program
five years, until the end of 2019. It would also extend the deadline for mandatory recoupment
seven years, until September 30, 2024. The bill has been referred to the House Committee on
Financial Services.
The Fostering Resilience to Terrorism Act of 2013 (H.R. 1945)
Representative Bennie Thompson along with one cosponsor introduced H.R. 1945 on May 9,
2013. The bill would extend the expiration date of the program 10 years, until the end of 2024,
and would extend the deadline for mandatory recoupment seven years, until September 30, 2024.
It would also add the Secretary of Homeland Security as the lead authority responsible for
certifying an act of terrorism and require the Secretary to provide information and reports on
terrorism risks and best practices to foster resilience in the face of terrorism. The Secretary of the
Treasury would remain in the certification process but as a concurring party, not the lead
authority; the program in general would remain under the authority of the Treasury. H.R. 1945
has been referred to the House Committee on Financial Services and the House Committee on
Homeland Security.
Terrorism Risk Insurance Program Reauthorization Act of 2013
(H.R. 2146)
Representative Michael Capuano along with 20 cosponsors introduced H.R. 2146 on May 23,
2013. The bill is a reauthorization of the existing TRIA program that would extend the program
10 years, until the end of 2024, as well as extend the deadline for mandatory recoupment by 10
years, until September 30, 2027. In addition, the President’s Working Group on Financial Markets
is to continue filing reports on market conditions for terrorism risk insurance, with reports
required in 2017, 2020, and 2023. The bill has been referred to the House Committee on
Financial Services.

4 See, for example, Marsh, Inc. 2014 Terrorism Risk Insurance Report, April 2014.
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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

Terrorism Risk Insurance Program Reauthorization Act of 2014
(S. 2244)
Senator Charles Schumer along with eight cosponsors introduced S. 2244 on April 10, 2014. The
bill would extend the current TRIA program seven years, until December 31, 2021, while also
decreasing the federal loss sharing amount and increasing the amount to be retained by the
industry and recouped by the government. Specifically, S. 2244 as introduced would
• decrease the federal loss sharing gradually from 85% to 80%, and
• increase the insurance marketplace aggregate retention amount by $2 billion per
year until it reaches $37.5 billion from the current $27.5 billion, and
• extend the various dates for mandatory recoupment by seven years.
Under these extended dates, if an act of terrorism occurs prior to 2018, all mandatory recoupment
premiums must be collected by September 30, 2019. If an act occurs in 2018, 35% of the
mandatory recoupment premiums would be collected by September 30, 2019, with the rest by
September 30, 2024. If the terrorist act occurs after 2018, all of the mandatory recoupment
premiums would be collected by September 30, 2024.
Committee Consideration
The Senate Committee on Banking, Housing, and Urban Affairs marked up S. 2244 on June 3,
2014. A number of amendments were adopted en bloc, including
• a change in the mandatory recoupment provisions to require that 135.5% of the
federal payments be recouped;
• a requirement for the Treasury to study the certification process and issue final
rules governing the process, including a timeline; and
• a Government Accountability Office (GAO) study of the possible effects of
instituting premiums to be paid by the insurer to the government for the coverage
provided under TRIA.
One amendment was rejected on a recorded vote in committee. Senator Tom Coburn offered an
amendment that would have changed the timing of the mandatory recoupment, giving more time
for the recoupment in the case of larger attacks. This amendment failed on a vote of 7-15. The bill
as amended was ordered reported favorably on a vote of 22-0. The written report (S.Rept. 113-99)
was filed on June 26, 2014.
Senate Floor Consideration
S. 2244 was considered by the full Senate by unanimous consent on July 17, 2014, with three
amendments adopted.
• S.Amdt. 3552 was offered by Senator Jon Testor. This amendment added a
second title to the bill relating to the licensing of insurance agents and brokers.
This Title II is similar to both H.R. 1155 and Title II of S. 1926 as the two bills
passed the House and the Senate respectively. S.Amdt. 3552 included a two-year
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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

sunset provision, however, that was not in either of these bills. It was adopted by
voice vote.
• S.Amdt. 3551 was offered by Senator Jeff Flake. This amendment added an
advisory committee on risk sharing mechanism; similar language is included in
H.R. 4871. This amendment was adopted on a vote of 97-0.
• S.Amdt. 3550 was offered by Senator David Vitter. This amendment added a
section requiring that one member of the Board of Governors of the Federal
Reserve have experience with community banking. It was adopted by voice vote.
Senator Coburn offered S.Amdt. 3549 extending the timing of the recoupment provisions in the
case of a large terrorist attack. A point of order on budgetary grounds was raised against this
amendment and a motion to waive this point of order was rejected on a vote of 48-49. The
amended version of S. 2244 was passed by the full Senate on a vote of 93-4.
Administration Reaction
The Office of Management and Budget (OMB) released a Statement of Administration Policy
(SAP) on July 17, 2014. This SAP endorsed extension of the TRIA program along with reforms to
“further reduce taxpayer exposure, increase private sector contributions, and better position the
Program for future transition to the private sector.” It also specifically supported Senate passage
of S. 2244.5
House Floor Consideration
The House Committee on Rules met on December 9, 2014, and reported a rule (H.Res. 775)
making in order the House floor consideration of S. 2244 with an amendment in the nature of a
substitute.6 This substitute amendment would
• extend the program six years, until the end of 2020;
• decrease the federal loss sharing gradually from 85% to 80%;
• increase the program trigger by $20 million per year until it reaches $200 million
from the current $100 million;
• increase the insurance marketplace aggregate retention amount by $2 billion per
year until it reaches $37.5 billion from the current $27.5 billion. After $37.5
billion is reached, the amount would be set by the Secretary to equal the annual
average of the aggregate sum of insurer deductibles for the previous three years;
• extend the various dates for mandatory recoupment by seven years;
• change in the mandatory recoupment provisions to require that 140% of the
federal payments be recouped;

5 Office of Management and Budget, Statement of Administration Policy: S. 2244, July 17, 2014, available at
http://www.whitehouse.gov/sites/default/files/omb/legislative/sap/113/saps2244s_20140717.pdf.
6 Text of the substitute amendment is available at http://rules.house.gov/bill/113/s-2244.
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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

• require the Treasury to study the certification process and issue final rules
governing the process, including a timeline;
• require additional data on the terrorism insurance market be collected by the
Treasury and included in an annual report by the Treasury; and
• require a GAO study on the possible effects of instituting insurer premiums for
the TRIA coverage and requiring capital reserve funds for terrorism.
The substitute amendment also includes the NARAB title relating to insurance agent licensing
and the section relating to the makeup of Federal Reserve Board of Governors, which were added
in Senate floor consideration. In addition, the substitute amendment adds a Title III, the
“‘Business Risk Mitigation and Price Stabilization Act of 2014.’’ Title III would amend statutory
provisions originating in the 2010 Dodd-Frank Act7 relating to derivatives and margin
requirements for end users.8 Similar provisions to Title III passed the House as H.R. 634 on June
12, 2013, by a vote of 411-12.
The House took up S. 2244 as amended under H.Res. 775 on December 10, 2014, and passed the
bill on a vote of 417-7.
TRIA Reform Act of 2014 (H.R. 4871)
H.R. 4871 was introduced by Representative Randy Neugebauer and one cosponsor on June 17,
2014. The bill would extend the TRIA program five years while generally reducing the
government’s exposure to future TRIA losses, increasing post-event recoupment, and making
several other changes to the program. The provisions include
• a gradual reduction of federal share of losses from 85% to 80%;
• a gradual increase in program trigger from $100 million to $500 million and
removal of the $5 million minimum certification amount;
• a separate treatment of Nuclear, Biological, Chemical, and Radiological (NBCR)
terrorist attacks with lower trigger ($100 million) and higher federal loss sharing
(85%);
• a requirement that certification occur within 90 days of an attack;
• an increase in the maximum of the mandatory recoupment amount to the total of
insurer deductibles under the program (currently approximately $36 billion) and
removal of a provision that decreases mandatory recoupment in the case of very
large attacks;
• an increase of the mandatory recoupment from 133% to 150% of the federal
share of losses;

7 P.L. 111-203.
8 For more information see “Margin for Non-Financial Entities or ‘Commercial End Users’” in CRS Report R43117,
The Commodity Futures Trading Commission: Background and Current Issues, by Rena S. Miller.
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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis

• an allowance for small insurers to opt out of the TRIA requirement to make
terrorism coverage available if it would create financial hardship or be financially
infeasible;9
• a requirement that additional data on the terrorism insurance market be collected
by Treasury and included in an annual report by Treasury; and
• a requirement for a GAO study on the possible effects of instituting insurer
premiums for the TRIA coverage and requiring capital reserve funds for
terrorism, Congressional Budget Office (CBO) and OMB studies regarding
budgeting and costs of federal insurance programs, and a Treasury study on small
insurer market competitiveness.
Committee Consideration
The House Committee on Financial Services marked up H.R. 4871 beginning June 19, 2014, and
ordered the bill favorably reported on June 20, 2014, by a vote of 32-27. During the markup, a
second title was added containing the text of the National Association of Registered Agents and
Brokers Reform Act of 2013 (H.R. 1155), which previously passed both the committee and the
full House of Representatives.10 The committee rejected a substitute amendment by
Representative Maxine Waters, which would have replaced the text with a 10-year reauthorization
of the current program, on a vote of 27-31. The bill was reported (H.Rept. 113-523) on July 16,
2014.
Table 1 below presents a side-by-side comparison of the current law and legislation that has seen
committee or floor action, or both.


9 Small insurers could request to opt out from their domiciliary state regulator using criteria set by the Secretary of the
Treasury.
10 For more information, see CRS Report R43095, Insurance Agent Licensing: Overview and Background on Federal
“NARAB” Legislation, by Baird Webel.
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Table 1. Terrorism Risk Insurance Side-by Side: Current Law and Legislation
15 U.S.C. §6701 note
S. 2244
H.R. 4871
S. 2244
Provision
(as applicable in 2014)
(as passed by the Senate)
(Title I as reported)
(as passed by the House)
Title
Terrorism Insurance Program
Terrorism Risk Insurance
TRIA Reform Act of 2014
Terrorism Risk Insurance
Program Reauthorization Act of
Program Reauthorization Act of
2014
2014
Termination Date
December 31, 2014 (§108(a))
December 31, 2021 (§2)
December 31, 2019 (§102)
December 31, 2020 (§101)
Certification of an Act of
Terrorist act is to be certified
Requires the Secretary to study
Beginning in 2015, removes the
Beginning in 2015, removes the
Terrorism
by the Secretary of the
and report on the certification
Secretary of State from
Secretary of State from
Treasury (hereafter “the
process. After the study is
certification process. Adds
certification process. Adds
Secretary”) in concurrence with completed, the Secretary is to
"consultation" with the
"consultation" with the
the Attorney General and
issue rules governing the
Secretary of Homeland Security. Secretary of Homeland Security.
Secretary of State. Terrorist act
process, including a timeline as
Removes the $5 million
(§105)
must cause $5 million in insured to whether an act is considered
minimum size for certification.
losses to be certified.
an act of terrorism. (§6)
Requires the Secretary to study
(§102(1)(A))
Beginning in 2015, adds a
and report on the certification
deadline of 15 days for
process. After the study is
"preliminary certification" and
completed, the Secretary is to
90 days for "final certification."
issue rules governing the
If no certification is made within process, including a timeline as
90 days, no certification is
to whether an act is considered
possible. (§103)
an act of terrorism. (§107)
Beginning in 2016, certification
is to include whether or not
terrorist act is an act of
Nuclear, Biological, Chemical,
or Radiological (NBCR)
terrorism according to the
definition added by the
legislation. (§104(a))
CRS-7

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15 U.S.C. §6701 note
S. 2244
H.R. 4871
S. 2244
Provision
(as applicable in 2014)
(as passed by the Senate)
(Title I as reported)
(as passed by the House)
Insured Loss Shared
Federal share of losses will be
Starting in 2016, the federal
Federal share of losses will be
Starting in 2016, the federal
Compensation
85% for insured losses that
share of losses will decrease
85% in 2015, 84% in 2016, 83%
share of losses will decrease
exceed the applicable insurer
one percentage point per
in 2017, 82% in 2018, and 80%
one percentage point per
deductible. (§103(e))
calendar year until equal to
in 2019 except in the case of an
calendar year until equal to
80%. (§3)
NBCR terrorist event. For an
80%. (§102)
NBCR attack, the federal share
of losses will remain at 85%.
(§104(b))
Program Trigger
No compensation shall be paid
No Change
Increases program trigger to
Beginning in 2015, program
unless the aggregate industry
$200 million in 2016, $300
trigger increases $20 million per
insured losses resulting from
million in 2017, $400 million in
year until it reaches $200
such certified act of terrorism
2018, and $500 million in 2019.
million. Applies program trigger
exceed $100 million.
Applies program trigger to the
to the aggregate losses from
(§103(e)(1)(B))
aggregate losses from multiple
multiple acts of terrorism in a
acts of terrorism in a calendar
calendar year. (§103)
year if the insured losses from
each act exceed $50 million.
Program trigger for NBCR
attacks remains at $100 million.
(§104(c))
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15 U.S.C. §6701 note
S. 2244
H.R. 4871
S. 2244
Provision
(as applicable in 2014)
(as passed by the Senate)
(Title I as reported)
(as passed by the House)
Treatment of NBCR Terrorism
No Similar Provisions
No Similar Provisions
Beginning in 2016, certification
No Similar Provisions
is to include whether or not
terrorist act is an act of NCBR
terrorism according to the
definition added by the
legislation. (§104(a))
Federal share of losses will be
85% in 2015, 84% in 2016, 83%
in 2017, 82% in 2018, and 80%
in 2019 except in the case of an
NBCR terrorist event. For an
NBCR attack, the federal share
of losses will remain at 85%.
(§104(b))
Program trigger for NBCR
attacks remains at $100 million.
(§104(c))
Mandatory Availability
Insurers are required to make
No Change
Small insurers, as defined by the
No Change
terrorism coverage available to
Secretary, may be exempted
insureds. (§103(c))
from mandatory availability
upon request. This exemption
applies if meeting the make
available requirement is
determined by the insurer’s
domiciliary state insurance to
cause financial hardship or be
financially infeasible. This
determination would be based
on criteria set by the Secretary.
(§105)
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15 U.S.C. §6701 note
S. 2244
H.R. 4871
S. 2244
Provision
(as applicable in 2014)
(as passed by the Senate)
(Title I as reported)
(as passed by the House)
Aggregate Retention Amount
The aggregate retention amount Beginning in the calendar year
Beginning in 2016, the retention
Beginning in the calendar year
is the lesser of (1) the total of
after enactment, the retention
amount would be the lesser of
after enactment, the retention
all insured losses or (2) $27.5
amount would be the lesser of
(1) the total of all insurer
amount would be the lesser of
billion.
(1) the total of all insured losses deductibles in the previous year
(1) the total of all insured losses
(§103(e)(6))
or (2) $29.5 billion with this
or (2) the total of all insured
or (2) $29.5 billion with this
amount further increased by $2
losses. (§107)
amount further increased by $2
billion per year until reaching
billion per year until reaching
$37.5 billion. (§4(1))
$37.5 billion. Once it reaches
$37.5 billion, it shall be set by
the Secretary to equal the
annual average of the sum of
insurer deductibles for the
previous three years. (§104(1))
Mandatory Recoupment of
If aggregate insured losses are
The gradual increase in the
Mandatory recoupment
The gradual increase in the
Federal Share
under the aggregate retention
aggregate retention amount to
increases to 150% of the federal aggregate retention (§104(1))
amount, a mandatory
$37.5 billion (§4(1)) effectively
share of losses beginning in
effectively increases the level of
recoupment of 133% of the
increases the level of mandatory 2016 and al years thereafter.
mandatory recoupment.
federal share of the loss will be
recoupment.
(§106)
imposed.
Increases the mandatory
Increases the mandatory
Beginning in 2016, mandatory
recoupment to 140% of the
If aggregate insured losses are
recoupment to 135.5% of the
recoupment amount is equal to
federal share of losses.
over the aggregate retention
federal share of losses. (§4(2))
the lesser of (1) the aggregate
(§104(2))
amount, but uncompensated

amount of federal compensation
insurer losses do not exceed
received by insurers or (2) the
the aggregate retention amount,
aggregate retention amount.
the mandatory recoupment
(§107)
amount is reduced by this
amount.
If uncompensated insurer losses
are over the aggregate
retention amount, there is no
mandatory recoupment, but
Secretary of the Treasury
retains discretionary
recoupment authority.
(§103(e)(7))
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15 U.S.C. §6701 note
S. 2244
H.R. 4871
S. 2244
Provision
(as applicable in 2014)
(as passed by the Senate)
(Title I as reported)
(as passed by the House)
Timing of Mandatory
Requires expedited col ection of Requires expedited col ection of Beginning in 2016, requires that
Requires expedited collection of
Recoupment
recoupment amounts:
recoupment amounts:
recoupment commence within
recoupment amounts:
18 months of an attack. (§108)
(1) for a terrorist attack before
(1) for a terrorist attack before
(1) for a terrorist attack before
2011, al required recoupment
2018, al required recoupment
2018, all required recoupment
amounts must be col ected by
amounts must be col ected by
amounts must be col ected by
September 30, 2012;
September 30, 2019;
September 30, 2019;
(2) for a terrorist attack in
(2) for a terrorist attack in
(2) for a terrorist attack in
2011, 35% of required
2018, 35% of required
2018, 35% of required
recoupment amounts must be
recoupment amounts must be
recoupment amounts must be
col ected by September 30,
col ected by September 30,
col ected by September 30,
2012, and the balance must be
2019, and the balance must be
2019, and the balance must be
col ected by September 30,
col ected by September 30,
col ected by September 30,
2017; and
2024; and
2024; and
(3) for a terrorist attack after
(3) for a terrorist attack after
(3) for a terrorist attack after
2011, al required recoupment
2018, al required recoupment
2018, all required recoupment
amounts must be col ected by
amounts must be col ected by
amounts must be col ected by
September 30, 2017.
September 30, 2024.
September 30, 2024.
(§103(e)(7)(E)(i))
(§4(2))
(§104(2))
Risk Sharing Mechanisms
No Similar Provisions
Establishes an advisory
Establishes an advisory
Establishes an advisory
committee to encourage the
committee to encourage the
committee to encourage the
creation and development of
creation and development of
creation and development of
private risk-sharing mechanisms. private risk-sharing mechanisms. private risk-sharing mechanisms.
(§9)
(§109)
(§110)
CRS-11

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15 U.S.C. §6701 note
S. 2244
H.R. 4871
S. 2244
Provision
(as applicable in 2014)
(as passed by the Senate)
(Title I as reported)
(as passed by the House)
Reporting of Terrorism
Requires Secretary to annual y
No Change
Beginning in 2016, requires
Beginning in 2016, requires
Insurance Data
compile information on
Secretary to col ect data from
Secretary to col ect data from
terrorism insurance premiums.
insurers on terrorism insurance
insurers on terrorism insurance
To the extent that such data
coverage, including: lines of
coverage, including: lines of
are not otherwise available, the
insurance with terrorism
insurance with terrorism
Secretary may require insurers
exposure, premiums earned
exposure, premiums earned
to submit the information to
from terrorism coverage,
from terrorism coverage,
the NAIC, which shall make it
location of exposure, pricing of
location of exposure, pricing of
available to the Secretary.
coverage, take-up rates, and
coverage, take-up rates, and
(§108(e))
amount of private reinsurance
amount of private reinsurance
purchased. If such data are
purchased. If such data are
available from the states or
available from the states or
another source, the Secretary
another source, the Secretary
shall collect the data from this
shall collect the data from this
source. The Secretary shall
source. The Secretary shall
issue a report to Congress
issue a report to Congress
based on these data. (§110)
based on these data. (§111)
Definition of Control
An entity is considered to have
Adds the proviso that an entity
Adds the proviso that an entity
Adds the proviso that an entity
control over another entity if
is not considered to have
is not considered to have
is not considered to have
the entity has the power to
control if, on the date of
control if, on the date of
control if, on the date of
vote 25% of the voting
enactment, the entity is “acting
enactment, the entity is “acting
enactment, the entity is “acting
securities; controls the election
as an attorney-in-fact ... for the
as an attorney-in-fact ... for the
as an attorney-in-fact ... for the
of the majority of the directors;
other entity and such other
other entity and such other
other entity and such other
or the Secretary determines
entity is a reciprocal insurer.”
entity is a reciprocal insurer.”
entity is a reciprocal insurer.”
that the entity exercises control This, however, does not apply if
This, however, does not apply if
This, however, does not apply if
after notice and hearing.
the entity is defined as having
the entity is defined as having
the entity is defined as having
(§102(3))
control for reasons other than
control for reasons other than
control for reasons other than
the attorney-in-fact relationship. the attorney-in-fact relationship. the attorney-in-fact relationship.
(§5(1))
(§112)
(§106(1))
CRS-12

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15 U.S.C. §6701 note
S. 2244
H.R. 4871
S. 2244
Provision
(as applicable in 2014)
(as passed by the Senate)
(Title I as reported)
(as passed by the House)
Studies and Reports
The Secretary shal conduct an
GAO shal conduct a study and
The Secretary shall issue a
GAO shal conduct a study and
expedited study of the
issue a report on the viability of
report to Congress based on
issue a report on the viability of
availability and affordability of
the government col ecting
the terrorism insurance data
(1) the government col ecting
group life insurance coverage.
upfront terrorism insurance
col ected under Section 11 to
upfront terrorism insurance
(§103(h))
premiums on insurers within
be completed by June 30, 2017
premiums on insurers including
two years from the date of
and annual y thereafter. (§110)
international practices and (2)
The Secretary shall conduct
enactment. (§7)
the creation of a mandatory
study and issue a report on the
The Secretary shall conduct an
capital reserve fund to dedicate
potential effect of terrorism on
annual study of smal insurer
capital for terrorism losses
life insurance and other
competitiveness and issue an
before such losses occur within
personal lines by October 2003.
annual report on this study with two years from the date of
(§103(i))
the first report not later than
enactment. (§108)
June 30, 2016. (§113)
The Secretary shall conduct a
The Secretary shall issue a
study and issue a report no
CBO and OMB shall each
report to Congress based on
later than June 30, 2005 on the
conduct a study and issue a
the terrorism insurance data
effectiveness of the program
report regarding the application
col ected under Section 11 to
and the capacity of private
of accrual accounting concepts
be completed by June 30, 2017
insurers to offer terrorism
to TRIA and other federal
and annually thereafter. (§111)
coverage after the expiration of
insurance programs not later
the program. (§104(d))
than 12 months after the date
The Secretary shall conduct an
of enactment. (§114)
annual study of small insurer
President’s Working Group on
competitiveness and issue an
Financial Markets is to report
GAO shal conduct a study and
annual report on this study with
on the market conditions for
issue a report on the viability of
the first report not later than
terrorism risk insurance in
(1) the government col ecting
June 30, 2016. (§112)
2006, 2010, and 2013. (§104(e))
upfront terrorism insurance
premiums on insurers and (2)
GAO shall conduct a study and
the creation of a mandatory
issue a report on the availability
capital reserve fund to dedicate
and affordability of NBCR
capital for terrorism losses
coverage and the outlook for
before such losses occur within
future coverage by December
two years from the date of
2008. (§104(f))
enactment. (§115)
GAO shall conduct a study and
issue a report on the availability
and affordability of terrorism
insurance in specific markets by
June 2008. (§104(g))
CRS-13

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Source: CRS; using material from the U.S. Treasury, http://www.congress.gov, and the House Committee on Rules.
Notes: Section numbers for the initial TRIA law are as codified in 15 U.S.C. §6701 note. Section numbers for current legislation are from the legislation as amended. S.
2244 as passed by the Senate and the House substitute amendment to S. 2244 also include technical corrections that delete outdated language from several sections of
the TRIA statute (Section 5(2) and Section 106, respectively), a section relating to the composition of the Federal Reserve Board of Governors (Section 8 and Section
109, respectively), and a second title in both bills relating to insurance agent licensing. The substitute amendment also adds a Title III related to derivatives. These
sections and titles are not included in the chart.

CRS-14

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Terrorism Risk Insurance Legislation: Issue Summary and Side-by-Side Analysis


Author Contact Information
Baird Webel
Specialist in Financial Economics
bwebel@crs.loc.gov, 7-0652

Congressional Research Service
15

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