2022 Report on the Effectiveness of the Terrorism Risk Insurance Program

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Published

March 30, 2022

Issuing agencies

Treasury Department

Abstract

The Terrorism Risk Insurance Act of 2002, as amended (TRIA), established the Terrorism Risk Insurance Program (TRIP or Program). TRIA requires the Secretary of the Treasury (Secretary) to submit a report to Congress by June 30, 2022 concerning, in general, the overall effectiveness of TRIP. To assist the Secretary in formulating the report, the Federal Insurance Office (FIO) within the Department of the Treasury (Treasury) is seeking comments from the insurance sector and other stakeholders on the statutory factors to be analyzed in the report, as well as feedback on other issues relating to the effectiveness of TRIP.

Full Text

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<title>Federal Register, Volume 87 Issue 61 (Wednesday, March 30, 2022)</title>
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[Federal Register Volume 87, Number 61 (Wednesday, March 30, 2022)]
[Notices]
[Pages 18473-18474]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-06681]

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DEPARTMENT OF THE TREASURY

2022 Report on the Effectiveness of the Terrorism Risk Insurance
Program

AGENCY: Departmental Offices, Department of the Treasury.

ACTION: Request for comment.

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SUMMARY: The Terrorism Risk Insurance Act of 2002, as amended (TRIA),
established the Terrorism Risk Insurance Program (TRIP or Program).
TRIA requires the Secretary of the Treasury (Secretary) to submit a
report to Congress by June 30, 2022 concerning, in general, the overall
effectiveness of TRIP. To assist the Secretary in formulating the
report, the Federal Insurance Office (FIO) within the Department of the
Treasury (Treasury) is seeking comments from the insurance sector and
other stakeholders on the statutory factors to be analyzed in the
report, as well as feedback on other issues relating to the
effectiveness of TRIP.

DATES: Submit comments on or before May 16, 2022.

ADDRESSES: Submit comments electronically through the Federal
eRulemaking Portal at <a href="http://www.regulations.gov">http://www.regulations.gov</a>, in accordance with
the instructions on that site, or by mail to the Federal Insurance
Office, Attn: Richard Ifft, Room 1410 MT, Department of the Treasury,
1500 Pennsylvania Avenue NW, Washington, DC 20220. Because postal mail
may be subject to processing delays, it is recommended that comments be
submitted electronically. If submitting comments by mail, please submit
an original version with two copies. Comments concerning the 2022
report on the effectiveness of the Terrorism Risk Insurance Program
should be captioned with ``2022 TRIP Effectiveness Report.'' In
general, Treasury will post all comments to <a href="http://www.regulations.gov">www.regulations.gov</a> without
change, including any business or personal information provided such as
names, addresses, email addresses, or telephone numbers. All comments,
including attachments and other supporting materials, are part of the
public record and subject to public disclosure. You should submit only
information that you wish to make available publicly. Where
appropriate, a comment should include a short Executive Summary (no
more than five single-spaced pages).
Additional Instructions. Responses should also include: (1) The
data or rationale, including examples, supporting any opinions or
conclusions; and (2) any specific legislative, administrative, or
regulatory proposals for carrying out recommended approaches or
options.

FOR FURTHER INFORMATION CONTACT: Richard Ifft, Senior Insurance
Regulatory Policy Analyst, Federal Insurance Office, (202) 622-2922,
Sherry Rowlett, Program Analyst, Federal Insurance Office, (202) 622-
1890, Jeremiah Pam, Senior Insurance Regulatory Policy Analyst, Federal
Insurance Office, (202) 622-7009, or Saurav Banerjee, Senior Insurance
Regulatory Policy Analyst, Federal Insurance Office, (202) 622-5330.
Persons who have difficulty hearing or speaking may access these
numbers via TTY by calling the toll-free Federal Relay Service at (800)
877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

TRIA \1\ requires participating insurers to make insurance
available for losses resulting from acts of terrorism and provides a
federal government backstop for the insurers' resulting financial
exposure. TRIA established TRIP within Treasury, and TRIP is
administered by the Secretary with the assistance of FIO. TRIA Section
104(h)(2) requires the Secretary to periodically prepare and submit a
report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate on, among other things, the impact and
effectiveness of TRIP (Effectiveness Report). TRIA was reauthorized in
December 2019 with an additional requirement that Treasury's
Effectiveness Reports analyze the availability and affordability of
terrorism risk insurance, including specifically for houses of worship.
The Effectiveness Report that is to be submitted by June 30, 2022 will
include an analysis of information that is being collected by Treasury
through the 2022 TRIP Data Call,\2\ as well as data that Treasury
collected in prior TRIP Data Calls. Treasury's data calls are conducted
to obtain information to facilitate Treasury's analysis of the
effectiveness of TRIP and the competitiveness of small insurers in the
terrorism risk insurance marketplace,\3\ as well as to assist Treasury
more generally in the administration of TRIP.
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\1\ Public Law 107-297, 116 Stat. 2322, codified at 15 U.S.C.
6701, note. Because the provisions of TRIA (as amended) appear in a
note, instead of particular sections, of the United States Code, the
provisions of TRIA are identified by the sections of the law.
\2\ Terrorism Risk Insurance Program 2022 Data Call, 86 FR 64600
(November 18, 2021) (identifying proposed changes to 2022 TRIP Data
Call).
\3\ TRIA section 108(h).
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II. Solicitation for Comments

Treasury seeks comments on each of the following factors, which
Treasury is required under TRIA Section 104(h)(2) to consider in the
Effectiveness Report:
1. The overall effectiveness of TRIP;
2. The availability and affordability of terrorism risk insurance,
including specifically for places of worship;
3. Any changes or trends relating to the data Treasury collects in
its annual TRIP Data Calls, and the implications of such observations
with regard to the effectiveness of TRIP;
4. Whether any aspects of TRIP have the effect of discouraging or
impeding insurers from providing one or more lines of commercial
property and casualty insurance coverage or coverage for acts of
terrorism; and

[[Page 18474]]

5. Any impact of TRIP on workers' compensation insurers in
particular.
This request for comment will provide stakeholders the opportunity
to provide qualitative feedback and analysis that may not be otherwise
observable through the results of the TRIP Data Calls. Information and
views of stakeholders on the factors listed above will assist Treasury
in the formulation of the Effectiveness Report and provide meaningful
opportunity for stakeholder engagement. In addition, and more
generally, such public input may assist the Secretary in the
administration of TRIP.
In addition to seeking comments on the above factors outlined in
Section 104(h)(2) of TRIA, Treasury understands that other issues and
factors in the insurance market relating to terrorism risk insurance,
in addition to those factors specified in TRIA, could have an impact on
the effectiveness of the Program. Treasury accordingly also seeks
comments on the following topics:

General Questions

1. Whether any lines of insurance or coverages within certain lines
of insurance currently subject to the Program no longer require the
support of TRIP to ensure the availability and affordability of
terrorism risk insurance;
2. Whether any lines of insurance or coverages within certain lines
of insurance currently not subject to the Program should be included
within TRIP to promote the availability and affordability of terrorism
risk insurance;
3. Whether, and in what fashion, insurance market changes
associated with the impact of the COVID-19 pandemic have also affected
the market for terrorism risk insurance;
4. The availability of terrorism risk insurance coverage for losses
arising from nuclear, biological, chemical, or radiological (NBCR)
exposures, and the availability of reinsurance or capital markets
support for such terrorism risk insurance;

Cyber-Related Questions

5. The current state of the cyber insurance market, including the
scope of coverage available, the availability and affordability of such
coverage, and the effect of ransomware-related losses on the market;
6. Terrorism risk insurance issues presented by cyber-related
losses, and the impact of TRIP in connection with such exposures,
including views on cyber-related terrorism losses that are included
within TRIP and those losses outside of TRIP;
7. Any potential changes to TRIA or TRIP that would encourage the
take up of insurance for cyber-related losses arising from acts of
terrorism as defined under TRIA, including but not limited to the
modification of the lines of insurance covered by TRIP and revisions to
the current sharing mechanisms for cyber-related losses;
8. The availability of reinsurance or capital markets support for
cyber-related losses arising from acts of terrorism as defined under
TRIA;