Notice2023-06423
Comments in Aid of Analyses of the Terrorism Risk Insurance Program
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 28, 2023
Issuing agencies
Treasury Department
Abstract
The Terrorism Risk Insurance Act of 2002 (TRIA) created the Terrorism Risk Insurance Program (Program) to address disruptions in the market for terrorism risk insurance, to help ensure the continued availability and affordability of commercial property and casualty insurance for terrorism risk, and to allow for the private markets to stabilize and build insurance capacity to absorb any future losses for terrorism events. The Secretary of the Treasury (Secretary) administers the Program, with the assistance of the Federal Insurance Office (FIO). Treasury requests comments from interested parties regarding some of the issues that FIO will be analyzing in connection with its next report related to the participation of small insurers in the Program, including any competitive challenges such insurers face in the terrorism risk insurance marketplace.
Full Text
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<title>Federal Register, Volume 88 Issue 59 (Tuesday, March 28, 2023)</title>
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[Federal Register Volume 88, Number 59 (Tuesday, March 28, 2023)]
[Notices]
[Pages 18374-18376]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-06423]
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DEPARTMENT OF THE TREASURY
Comments in Aid of Analyses of the Terrorism Risk Insurance
Program
AGENCY: Departmental Offices, U.S. Department of the Treasury.
ACTION: Request for comments.
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SUMMARY: The Terrorism Risk Insurance Act of 2002 (TRIA) created the
Terrorism Risk Insurance Program (Program) to address disruptions in
the market for terrorism risk insurance, to help ensure the continued
availability and affordability of commercial property and casualty
insurance for terrorism risk, and to allow for the private markets to
stabilize and build insurance capacity to absorb any future losses for
terrorism events. The Secretary of the Treasury (Secretary) administers
the Program, with the assistance of the Federal Insurance Office (FIO).
Treasury requests comments from interested parties regarding some of
the issues that FIO will be analyzing in connection with its next
report related to the participation of small insurers in the Program,
including any competitive challenges such insurers face in the
terrorism risk insurance marketplace.
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DATES: Submit comments on or before May 12, 2023.
ADDRESSES: Submit comments electronically through the Federal
eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>, 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 should be captioned with ``2023 TRIA Small Insurer Study
Comments.'' Please include your name, group affiliation, address, email
address, and telephone number(s) in your comment. Where appropriate, a
comment should include a short Executive Summary (no more than five
single-spaced pages).
FOR FURTHER INFORMATION CONTACT: Richard Ifft, Senior Insurance
Regulatory Policy Analyst, Federal Insurance Office, Room 1410 MT,
Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC
20220, at (202) 622-2922 (not a toll-free number), Sherry Rowlett,
Program Analyst, Federal Insurance Office, at (202) 622-1890 (not a
toll free number), or Annette Burris, Senior Insurance Regulatory
Policy Analyst, Federal Insurance Office, at (202) 622-2541 (not a toll
free number). 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
Section 104(h) of TRIA \1\ directs the Secretary, beginning in
calendar year 2016, to ``require insurers participating in the Program
to submit to the Secretary such information regarding insurance
coverage for terrorism losses of such insurers as the Secretary
considers appropriate to analyze the effectiveness of the Program[.]''
This information and data includes information regarding: (1) lines of
insurance with exposure to such losses; (2) premiums earned on such
coverage; (3) geographical location of exposures; (4) pricing of such
coverage; (5) the take-up rate for such coverage; (6) the amount of
private reinsurance for acts of terrorism purchased; and (7) such other
matters as the Secretary considers appropriate.
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\1\ Public Law 107-297, 116 Stat. 2322, codified at 15 U.S.C.
6701, note. As 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.
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In addition, Section 108(h) of TRIA requires the Secretary to
conduct, by June 30, 2017 and every other year thereafter, a study of
small insurers (to be defined by the Secretary, as has been done under
31 CFR 50.4(z)) participating in the Program to identify any
competitive challenges that small insurers face in the terrorism risk
insurance marketplace. Section 108(h) also identifies specific matters
that Treasury is to analyze in the small insurers study. In addition to
the data that Treasury has previously collected and will be collecting
in the future, Treasury seeks comments from the public for use in the
study that Treasury must conduct concerning the participation of small
insurers in the Program.
II. Solicitation for Comments on Small Insurer Participation in the
Program
As discussed above, Treasury will be collecting certain data from
small insurers as part of its 2023 TRIP Data Call,\2\ which Treasury
will use (along with data collected by Treasury during prior TRIP Data
Calls) in connection with the study. Treasury welcomes comments
concerning small insurer participation in the Program generally, and
invites responses to the following particular issues specified in
Section 108(h) of TRIA:
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\2\ The 2023 TRIP Data Call has commenced. See Terrorism Risk
Insurance Program Annual Data Collection, <a href="https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/federal-insurance-office/terrorism-risk-insurance-program/annual-data-collection">https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/federal-insurance-office/terrorism-risk-insurance-program/annual-data-collection</a>.
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(1) Changes to the market share, premium volume, and policyholder
surplus of small insurers relative to large insurers.
(2) How the property and casualty insurance market for terrorism
risk differs between small and large insurers, and whether such a
difference exists within other perils.
(3) The impact of the Program's mandatory availability requirement
under Section 103(c) of TRIA on small insurers.
(4) The effect of increasing the trigger amount for the Program
under Section 103(e)(1)(B) of TRIA for small insurers.
(5) The availability and cost of private reinsurance for small
insurers.
(6) The impact that state workers' compensation laws have on small
insurers and workers' compensation carriers in the terrorism risk
insurance marketplace.
In addition, Treasury welcomes qualitative and quantitative
comments on the following additional topics that may be relevant to the
competitiveness of small insurers in the terrorism risk insurance
marketplace.
(1) Any potential constraints or market effects on the ability of
small insurers to provide coverage for nuclear, chemical, biological,
and radiological (NBCR) risks.
(2) Any risk management strategies and challenges faced by small
insurers in maintaining the ability to pay losses associated with
insured claims that are not subject to claims for the federal share of
compensation (e.g., losses below the Program Trigger, within the
insurer deductible, and within the insurer co-pay share).
(3) The effects, if any, on small insurer participation in the
terrorism risk insurance marketplace of the 2019 reauthorization of the
Program until December 31, 2027, under the sharing mechanisms in place
as of Calendar Year 2020.\3\
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\3\ See Terrorism Risk Insurance Program Reauthorization Act of
2019, Public Law 116-94, 133 Stat. 2534.
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(4) The role of small insurers in covering cyber-related acts of
terrorism under the Program, including any relevant developments in the
cyber insurance market.
(5) The role of small insurers in covering terrorism risk under the
Program for Places of Worship.\4\
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\4\ As defined in Treasury's TRIP Data Calls. See, e.g.,
Instructions for Terrorism Risk Insurance Program (TRIP) 2023 Data
Call Small Insurers at 22, located at <a href="https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/federal-insurance-office/terrorism-risk-insurance-program/annual-data-collection">https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/federal-insurance-office/terrorism-risk-insurance-program/annual-data-collection</a>.
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(6) The use of risk modeling techniques and other analytical tools
by small insurers to assess their risk exposure to losses within the
scope of the Program.
Treasury issued its first three studies of small insurers under
TRIA in June 2017,\5\ June 2019,\6\ and June 2021.\7\ In those studies,
Treasury addressed the statutory issues identified above, with
reference to data collected by Treasury in the TRIP Data Calls, as well
as other available sources. Treasury requests further comment on these
issues from
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interested parties, particularly with respect to any issue that an
interested party believes may not be fully evident solely by reference
to the aggregated data collected by Treasury.
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\5\ U.S. Treasury, Study of Small Insurer Competitiveness in the
Terrorism Risk Insurance Marketplace (June 2017), <a href="https://home.treasury.gov/system/files/311/Study_of_Small_Insurer_Competitiveness_in_the_Terrorism_Risk_Insurance_Marketplace_%28June_2017%29.pdf">https://home.treasury.gov/system/files/311/Study_of_Small_Insurer_Competitiveness_in_the_Terrorism_Risk_Insurance_Marketplace_%28June_2017%29.pdf</a>.
\6\ U.S. Treasury, Study of Small Insurer Competitiveness in the
Terrorism Risk Insurance Marketplace (June 2019), <a href="https://home.treasury.gov/system/files/311/2019_TRIP_SmallInsurer_Report.pdf">https://home.treasury.gov/system/files/311/2019_TRIP_SmallInsurer_Report.pdf</a>.
\7\ U.S. Treasury, Study of Small Insurer Competitiveness in the
Terrorism Risk Insurance Marketplace (June 2021), <a href="https://home.treasury.gov/system/files/311/2021TRIPSmallInsurerReportJune2021.pdf">https://home.treasury.gov/system/files/311/2021TRIPSmallInsurerReportJune2021.pdf</a>.
Steven E. Seitz,
Director, Federal Insurance Office.
[FR Doc. 2023-06423 Filed 3-27-23; 8:45 am]
BILLING CODE 4810-AK-P
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