Terrorism Insurance Implementation (C) Working Group
December 19, 2007
March 13, 2008

The Terrorism Insurance Implementation (C) Working Group met by conference call on Dec. 19, 2007 to discuss its proposed model bulletin developed to assist regulators and insurers regarding compliance with the Terrorism Risk Insurance Program Reauthorization Extension Act of 2007.

During the conference call the Working Group:

• Learned about the status of the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA).
• Discussed changes to the Terrorism Risk Insurance Program (TRIP) that will occur in light of the enactment of TRIPRA. Major changes include:
• Revising the definition of a certified act of terrorism to eliminate the requirement that the individual(s) are acting on behalf of any foreign person or foreign interest;
• Extending the program through December 31, 2014;
• Requiring clear and conspicuous notice to policyholders of the existence of the $100,000,000,000 cap;
• Fixing the Insurer Deductible at 20% of an insurer’s direct earned premium, and the federal share of compensation at 85% of insured losses that exceed insurer deductibles;
• Fixing the program trigger at $100,000,000 for all additional program years;
• Requiring the U.S. Treasury to promulgate regulations for determining pro-rata shares of insured losses under the program when insured losses exceed $100,000,000,000;
• Requiring various studies by the Comptroller General and the President’s Working Group on Financial Markets; and
• Accelerating the timing of the mandatory recoupment of the federal share through policyholders surcharges.
• Adopted the proposed model bulletin with a recommendation that all states promulgate it as soon as President Bush signed TRIPRA into law (Note: this occurred on Dec. 27, 2007).

The Working Group met by conference call on March 13, 2008 in a regulator to regulator call with representatives of the Treasury’s Terrorism Risk Insurance Program Office. The call was conducted in accordance with item 8 and 9 of the NAIC’s Open Meetings Policy and in accordance with Section 104(c) of the TRIPRA. Discussions involved the TRIP Office’s development of a regulation related to procedures for determining the pro rata share of insured losses under the program when insured losses exceed $100,000,000,000.

Action Items

1. The working group adopted a model bulletin containing filing procedures for insurers for compliance with the provisions of TRIPRA.