§ 6701. — Operation of State law.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC6701]
TITLE 15--COMMERCE AND TRADE
CHAPTER 93--INSURANCE
Sec. 6701. Operation of State law
(a) State regulation of the business of insurance
The Act entitled ``An Act to express the intent of Congress with
reference to the regulation of the business of insurance'' and approved
March 9, 1945 (15 U.S.C. 1011 et seq.) (commonly referred to as the
``McCarran-Ferguson Act'') remains the law of the United States.
(b) Mandatory insurance licensing requirements
No person shall engage in the business of insurance in a State as
principal or agent unless such person is licensed as required by the
appropriate insurance regulator of such State in accordance with the
relevant State insurance law, subject to subsections (c), (d), and (e)
of this section.
(c) Affiliations
(1) In general
Except as provided in paragraph (2), no State may, by statute,
regulation, order, interpretation, or other action, prevent or
restrict a depository institution, or an affiliate thereof, from
being affiliated directly or indirectly or associated with any
person, as authorized or permitted by this Act or any other
provision of Federal law.
(2) Insurance
With respect to affiliations between depository institutions, or
any affiliate thereof, and any insurer, paragraph (1) does not
prohibit--
(A) any State from--
(i) collecting, reviewing, and taking actions (including
approval and disapproval) on applications and other
documents or reports concerning any proposed acquisition of,
or a change or continuation of control of, an insurer
domiciled in that State; and
(ii) exercising authority granted under applicable State
law to collect information concerning any proposed
acquisition of, or a change or continuation of control of,
an insurer engaged in the business of insurance in, and
regulated as an insurer by, such State;
during the 60-day period preceding the effective date of the
acquisition or change or continuation of control, so long as the
collecting, reviewing, taking actions, or exercising authority
by the State does not have the effect of discriminating,
intentionally or unintentionally, against a depository
institution or an affiliate thereof, or against any other person
based upon an association of such person with a depository
institution;
(B) any State from requiring any person that is acquiring
control of an insurer domiciled in that State to maintain or
restore the capital requirements of that insurer to the level
required under the capital regulations of general applicability
in that State to avoid the requirement of preparing and filing
with the insurance regulatory authority of that State a plan to
increase the capital of the insurer, except that any
determination by the State insurance regulatory authority with
respect to such requirement shall be made not later than 60 days
after the date of notification under subparagraph (A); or
(C) any State from restricting a change in the ownership of
stock in an insurer, or a company formed for the purpose of
controlling such insurer, after the conversion of the insurer
from mutual to stock form so long as such restriction does not
have the effect of discriminating, intentionally or
unintentionally, against a depository institution or an
affiliate thereof, or against any other person based upon an
association of such person with a depository institution.
(d) Activities
(1) In general
Except as provided in paragraph (3), and except with respect to
insurance sales, solicitation, and cross marketing activities, which
shall be governed by paragraph (2), no State may, by statute,
regulation, order, interpretation, or other action, prevent or
restrict a depository institution or an affiliate thereof from
engaging directly or indirectly, either by itself or in conjunction
with an affiliate, or any other person, in any activity authorized
or permitted under this Act and the amendments made by this Act.
(2) Insurance sales
(A) In general
In accordance with the legal standards for preemption set
forth in the decision of the Supreme Court of the United States
in Barnett Bank of Marion County N.A. v. Nelson, 517 U.S. 25
(1996), no State may, by statute, regulation, order,
interpretation, or other action, prevent or significantly
interfere with the ability of a depository institution, or an
affiliate thereof, to engage, directly or indirectly, either by
itself or in conjunction with an affiliate or any other person,
in any insurance sales, solicitation, or crossmarketing
activity.
(B) Certain State laws preserved
Notwithstanding subparagraph (A), a State may impose any of
the following restrictions, or restrictions that are
substantially the same as but no more burdensome or restrictive
than those in each of the following clauses:
(i) Restrictions prohibiting the rejection of an
insurance policy by a depository institution or an affiliate
of a depository institution, solely because the policy has
been issued or underwritten by any person who is not
associated with such depository institution or affiliate
when the insurance is required in connection with a loan or
extension of credit.
(ii) Restrictions prohibiting a requirement for any
debtor, insurer, or insurance agent or broker to pay a
separate charge in connection with the handling of insurance
that is required in connection with a loan or other
extension of credit or the provision of another traditional
banking product by a depository institution, or any
affiliate of a depository institution, unless such charge
would be required when the depository institution or
affiliate is the licensed insurance agent or broker
providing the insurance.
(iii) Restrictions prohibiting the use of any
advertisement or other insurance promotional material by a
depository institution or any affiliate of a depository
institution that would cause a reasonable person to believe
mistakenly that--
(I) the Federal Government or a State is responsible
for the insurance sales activities of, or stands behind
the credit of, the institution or affiliate; or
(II) a State, or the Federal Government guarantees
any returns on insurance products, or is a source of
payment on any insurance obligation of or sold by the
institution or affiliate;
(iv) Restrictions prohibiting the payment or receipt of
any commission or brokerage fee or other valuable
consideration for services as an insurance agent or broker
to or by any person, unless such person holds a valid State
license regarding the applicable class of insurance at the
time at which the services are performed, except that, in
this clause, the term ``services as an insurance agent or
broker'' does not include a referral by an unlicensed person
of a customer or potential customer to a licensed insurance
agent or broker that does not include a discussion of
specific insurance policy terms and conditions.
(v) Restrictions prohibiting any compensation paid to or
received by any individual who is not licensed to sell
insurance, for the referral of a customer that seeks to
purchase, or seeks an opinion or advice on, any insurance
product to a person that sells or provides opinions or
advice on such product, based on the purchase of insurance
by the customer.
(vi) Restrictions prohibiting the release of the
insurance information of a customer (defined as information
concerning the premiums, terms, and conditions of insurance
coverage, including expiration dates and rates, and
insurance claims of a customer contained in the records of
the depository institution or an affiliate thereof) to any
person other than an officer, director, employee, agent, or
affiliate of a depository institution, for the purpose of
soliciting or selling insurance, without the express consent
of the customer, other than a provision that prohibits--
(I) a transfer of insurance information to an
unaffiliated insurer in connection with transferring
insurance in force on existing insureds of the
depository institution or an affiliate thereof, or in
connection with a merger with or acquisition of an
unaffiliated insurer; or
(II) the release of information as otherwise
authorized by State or Federal law.
(vii) Restrictions prohibiting the use of health
information obtained from the insurance records of a
customer for any purpose, other than for its activities as a
licensed agent or broker, without the express consent of the
customer.
(viii) Restrictions prohibiting the extension of credit
or any product or service that is equivalent to an extension
of credit, lease or sale of property of any kind, or
furnishing of any services or fixing or varying the
consideration for any of the foregoing, on the condition or
requirement that the customer obtain insurance from a
depository institution or an affiliate of a depository
institution, or a particular insurer, agent, or broker,
other than a prohibition that would prevent any such
depository institution or affiliate--
(I) from engaging in any activity described in this
clause that would not violate section 106 of the Bank
Holding Company Act Amendments of 1970 [12 U.S.C. 1971
et seq.], as interpreted by the Board of Governors of
the Federal Reserve System; or
(II) from informing a customer or prospective
customer that insurance is required in order to obtain a
loan or credit, that loan or credit approval is
contingent upon the procurement by the customer of
acceptable insurance, or that insurance is available
from the depository institution or an affiliate of the
depository institution.
(ix) Restrictions requiring, when an application by a
consumer for a loan or other extension of credit from a
depository institution is pending, and insurance is offered
or sold to the consumer or is required in connection with
the loan or extension of credit by the depository
institution or any affiliate thereof, that a written
disclosure be provided to the consumer or prospective
customer indicating that the customer's choice of an
insurance provider will not affect the credit decision or
credit terms in any way, except that the depository
institution may impose reasonable requirements concerning
the creditworthiness of the insurer and scope of coverage
chosen.
(x) Restrictions requiring clear and conspicuous
disclosure, in writing, where practicable, to the customer
prior to the sale of any insurance policy that such policy--
(I) is not a deposit;
(II) is not insured by the Federal Deposit Insurance
Corporation;
(III) is not guaranteed by any depository
institution or, if appropriate, an affiliate of any such
institution or any person soliciting the purchase of or
selling insurance on the premises thereof; and
(IV) where appropriate, involves investment risk,
including potential loss of principal.
(xi) Restrictions requiring that, when a customer
obtains insurance (other than credit insurance or flood
insurance) and credit from a depository institution, or any
affiliate of such institution, or any person soliciting the
purchase of or selling insurance on the premises thereof,
the credit and insurance transactions be completed through
separate documents.
(xii) Restrictions prohibiting, when a customer obtains
insurance (other than credit insurance or flood insurance)
and credit from a depository institution or an affiliate of
such institution, or any person soliciting the purchase of
or selling insurance on the premises thereof, inclusion of
the expense of insurance premiums in the primary credit
transaction without the express written consent of the
customer.
(xiii) Restrictions requiring maintenance of separate
and distinct books and records relating to insurance
transactions, including all files relating to and reflecting
consumer complaints, and requiring that such insurance books
and records be made available to the appropriate State
insurance regulator for inspection upon reasonable notice.
(C) Limitations
(i) OCC deference
Section 6714(e) of this title does not apply with
respect to any State statute, regulation, order,
interpretation, or other action regarding insurance sales,
solicitation, or cross marketing activities described in
subparagraph (A) that was issued, adopted, or enacted before
September 3, 1998, and that is not described in subparagraph
(B).
(ii) Nondiscrimination
Subsection (e) of this section does not apply with
respect to any State statute, regulation, order,
interpretation, or other action regarding insurance sales,
solicitation, or cross marketing activities described in
subparagraph (A) that was issued, adopted, or enacted before
September 3, 1998, and that is not described in subparagraph
(B).
(iii) Construction
Nothing in this paragraph shall be construed--
(I) to limit the applicability of the decision of
the Supreme Court in Barnett Bank of Marion County N.A.
v. Nelson, 517 U.S. 25 (1996) with respect to any State
statute, regulation, order, interpretation, or other
action that is not referred to or described in
subparagraph (B); or
(II) to create any inference with respect to any
State statute, regulation, order, interpretation, or
other action that is not described in this paragraph.
(3) Insurance activities other than sales
State statutes, regulations, interpretations, orders, and other
actions shall not be preempted under paragraph (1) to the extent
that they--
(A) relate to, or are issued, adopted, or enacted for the
purpose of regulating the business of insurance in accordance
with the Act entitled ``An Act to express the intent of Congress
with reference to the regulation of the business of insurance''
and approved March 9, 1945 (15 U.S.C. 1011 et seq.) (commonly
referred to as the ``McCarran-Ferguson Act'');
(B) apply only to persons that are not depository
institutions, but that are directly engaged in the business of
insurance (except that they may apply to depository institutions
engaged in providing savings bank life insurance as principal to
the extent of regulating such insurance);
(C) do not relate to or directly or indirectly regulate
insurance sales, solicitations, or cross marketing activities;
and
(D) are not prohibited under subsection (e) of this section.
(4) Financial activities other than insurance
No State statute, regulation, order, interpretation, or other
action shall be preempted under paragraph (1) to the extent that--
(A) it does not relate to, and is not issued and adopted, or
enacted for the purpose of regulating, directly or indirectly,
insurance sales, solicitations, or cross marketing activities
covered under paragraph (2);
(B) it does not relate to, and is not issued and adopted, or
enacted for the purpose of regulating, directly or indirectly,
the business of insurance activities other than sales,
solicitations, or cross marketing activities, covered under
paragraph (3);
(C) it does not relate to securities investigations or
enforcement actions referred to in subsection (f) of this
section; and
(D) it--
(i) does not distinguish by its terms between depository
institutions, and affiliates thereof, engaged in the
activity at issue and other persons engaged in the same
activity in a manner that is in any way adverse with respect
to the conduct of the activity by any such depository
institution or affiliate engaged in the activity at issue;
(ii) as interpreted or applied, does not have, and will
not have, an impact on depository institutions, or
affiliates thereof, engaged in the activity at issue, or any
person who has an association with any such depository
institution or affiliate, that is substantially more adverse
than its impact on other persons engaged in the same
activity that are not depository institutions or affiliates
thereof, or persons who do not have an association with any
such depository institution or affiliate;
(iii) does not effectively prevent a depository
institution or affiliate thereof from engaging in activities
authorized or permitted by this Act or any other provision
of Federal law; and
(iv) does not conflict with the intent of this Act
generally to permit affiliations that are authorized or
permitted by Federal law.
(e) Nondiscrimination
Except as provided in any restrictions described in subsection
(d)(2)(B) of this section, no State may, by statute, regulation, order,
interpretation, or other action, regulate the insurance activities
authorized or permitted under this Act or any other provision of Federal
law of a depository institution, or affiliate thereof, to the extent
that such statute, regulation, order, interpretation, or other action--
(1) distinguishes by its terms between depository institutions,
or affiliates thereof, and other persons engaged in such activities,
in a manner that is in any way adverse to any such depository
institution, or affiliate thereof;
(2) as interpreted or applied, has or will have an impact on
depository institutions, or affiliates thereof, that is
substantially more adverse than its impact on other persons
providing the same products or services or engaged in the same
activities that are not depository institutions, or affiliates
thereof, or persons or entities affiliated therewith;
(3) effectively prevents a depository institution, or affiliate
thereof, from engaging in insurance activities authorized or
permitted by this Act or any other provision of Federal law; or
(4) conflicts with the intent of this Act generally to permit
affiliations that are authorized or permitted by Federal law between
depository institutions, or affiliates thereof, and persons engaged
in the business of insurance.
(f) Limitation
Subsections (c) and (d) of this section shall not be construed to
affect--
(1) the jurisdiction of the securities commission (or any agency
or office performing like functions) of any State, under the laws of
such State--
(A) to investigate and bring enforcement actions, consistent
with section 77r(c) of this title, with respect to fraud or
deceit or unlawful conduct by any person, in connection with
securities or securities transactions; or
(B) to require the registration of securities or the
licensure or registration of brokers, dealers, or investment
advisers (consistent with section 80b-3a of this title), or the
associated persons of a broker, dealer, or investment adviser
(consistent with such section 80b-3a of this title); or
(2) State laws, regulations, orders, interpretations, or other
actions of general applicability relating to the governance of
corporations, partnerships, limited liability companies, or other
business associations incorporated or formed under the laws of that
State or domiciled in that State, or the applicability of the
antitrust laws of any State or any State law that is similar to the
antitrust laws if such laws, regulations, orders, interpretations,
or other actions are not inconsistent with the purposes of this Act
to authorize or permit certain affiliations and to remove barriers
to such affiliations.
(g) Definitions
For purposes of this section, the following definitions shall apply:
(1) Affiliate
The term ``affiliate'' means any company that controls, is
controlled by, or is under common control with another company.
(2) Antitrust laws
The term ``antitrust laws'' has the meaning given the term in
subsection (a) of section 12 of this title, and includes section 45
of this title (to the extent that such section 45 relates to unfair
methods of competition).
(3) Depository institution
The term ``depository institution''--
(A) has the meaning given the term in section 1813 of title
12; and
(B) includes any foreign bank that maintains a branch,
agency, or commercial lending company in the United States.
(4) Insurer
The term ``insurer'' means any person engaged in the business of
insurance.
(5) State
The term ``State'' means any State of the United States, the
District of Columbia, any territory of the United States, Puerto
Rico, Guam, American Samoa, the Trust Territory of the Pacific
Islands, the Virgin Islands, and the Northern Mariana Islands.
(Pub. L. 106-102, title I, Sec. 104, Nov. 12, 1999, 113 Stat. 1352.)
References in Text
The McCarran-Ferguson Act, referred to in subsecs. (a) and
(d)(3)(A), is act Mar. 9, 1945, ch. 20, 59 Stat. 33, which is classified
generally to chapter 20 (Sec. 1011 et seq.) of this title. For complete
classification of this Act to the Code, see Short Title note set out
under section 1011 of this title and Tables.
This Act, referred to in subsecs. (c)(1), (d)(1), (4)(D)(iii), (iv),
(e), and (f)(2), is Pub. L. 106-102, Nov. 12, 1999, 113 Stat. 1338,
known as the Gramm-Leach-Bliley Act. For complete classification of this
Act to the Code, see Short Title of 1999 Amendment note set out under
section 1811 of Title 12, Banks and Banking, and Tables.
Section 106 of the Bank Holding Company Act Amendments of 1970,
referred to in subsec. (d)(2)(B)(viii)(I), is Pub. L. 91-607, title I,
Sec. 106, Dec. 31, 1970, 84 Stat. 1766, as amended, which is classified
generally to chapter 22 (Sec. 1971 et seq.) of Title 12, Banks and
Banking.
Short Title of 2002 Amendment
Pub. L. 107-297, Sec. 1(a), Nov. 26, 2002, 116 Stat. 2322, provided
that: ``This Act [amending section 248 of Title 12, Banks and Banking,
and sections 1606 and 1610 of Title 28, Judiciary and Judicial
Procedure, enacting provisions set out as notes under this section and
section 1610 of Title 28, and amending provisions set out as a note
under section 1610 of Title 28] may be cited as the `Terrorism Risk
Insurance Act of 2002'.''
Terrorism Insurance Program
Pub. L. 107-297, title I, Nov. 26, 2002, 116 Stat. 2322, provided
that:
``SEC. 101. CONGRESSIONAL FINDINGS AND PURPOSE.
``(a) Findings.--The Congress finds that--
``(1) the ability of businesses and individuals to obtain
property and casualty insurance at reasonable and predictable
prices, in order to spread the risk of both routine and catastrophic
loss, is critical to economic growth, urban development, and the
construction and maintenance of public and private housing, as well
as to the promotion of United States exports and foreign trade in an
increasingly interconnected world;
``(2) property and casualty insurance firms are important
financial institutions, the products of which allow mutualization of
risk and the efficient use of financial resources and enhance the
ability of the economy to maintain stability, while responding to a
variety of economic, political, environmental, and other risks with
a minimum of disruption;
``(3) the ability of the insurance industry to cover the
unprecedented financial risks presented by potential acts of
terrorism in the United States can be a major factor in the recovery
from terrorist attacks, while maintaining the stability of the
economy;
``(4) widespread financial market uncertainties have arisen
following the terrorist attacks of September 11, 2001, including the
absence of information from which financial institutions can make
statistically valid estimates of the probability and cost of future
terrorist events, and therefore the size, funding, and allocation of
the risk of loss caused by such acts of terrorism;
``(5) a decision by property and casualty insurers to deal with
such uncertainties, either by terminating property and casualty
coverage for losses arising from terrorist events, or by radically
escalating premium coverage to compensate for risks of loss that are
not readily predictable, could seriously hamper ongoing and planned
construction, property acquisition, and other business projects,
generate a dramatic increase in rents, and otherwise suppress
economic activity; and
``(6) the United States Government should provide temporary
financial compensation to insured parties, contributing to the
stabilization of the United States economy in a time of national
crisis, while the financial services industry develops the systems,
mechanisms, products, and programs necessary to create a viable
financial services market for private terrorism risk insurance.
``(b) Purpose.--The purpose of this title is to establish a
temporary Federal program that provides for a transparent system of
shared public and private compensation for insured losses resulting from
acts of terrorism, in order to--
``(1) protect consumers by addressing market disruptions and
ensure the continued widespread availability and affordability of
property and casualty insurance for terrorism risk; and
``(2) allow for a transitional period for the private markets to
stabilize, resume pricing of such insurance, and build capacity to
absorb any future losses, while preserving State insurance
regulation and consumer protections.
``SEC. 102. DEFINITIONS.
``In this title, the following definitions shall apply:
``(1) Act of terrorism.--
``(A) Certification.--The term `act of terrorism' means any
act that is certified by the Secretary, in concurrence with the
Secretary of State, and the Attorney General of the United
States--
``(i) to be an act of terrorism;
``(ii) to be a violent act or an act that is dangerous
to--
``(I) human life;
``(II) property; or
``(III) infrastructure;
``(iii) to have resulted in damage within the United
States, or outside of the United States in the case of--
``(I) an air carrier or vessel described in paragraph (5)(B);
or
``(II) the premises of a United States mission; and
``(iv) to have been committed by an individual or
individuals acting on behalf of any foreign person or
foreign interest, as part of an effort to coerce the
civilian population of the United States or to influence the
policy or affect the conduct of the United States Government
by coercion.
``(B) Limitation.--No act shall be certified by the
Secretary as an act of terrorism if--
``(i) the act is committed as part of the course of a
war declared by the Congress, except that this clause shall
not apply with respect to any coverage for workers'
compensation; or
``(ii) property and casualty insurance losses resulting
from the act, in the aggregate, do not exceed $5,000,000.
``(C) Determinations final.--Any certification of, or
determination not to certify, an act as an act of terrorism
under this paragraph shall be final, and shall not be subject to
judicial review.
``(D) Nondelegation.--The Secretary may not delegate or
designate to any other officer, employee, or person, any
determination under this paragraph of whether, during the
effective period of the Program, an act of terrorism has
occurred.
``(2) Affiliate.--The term `affiliate' means, with respect to an
insurer, any entity that controls, is controlled by, or is under
common control with the insurer.
``(3) Control.--An entity has `control' over another entity,
if--
``(A) the entity directly or indirectly or acting through 1
or more other persons owns, controls, or has power to vote 25
percent or more of any class of voting securities of the other
entity;
``(B) the entity controls in any manner the election of a
majority of the directors or trustees of the other entity; or
``(C) the Secretary determines, after notice and opportunity
for hearing, that the entity directly or indirectly exercises a
controlling influence over the management or policies of the
other entity.
``(4) Direct earned premium.--The term `direct earned premium'
means a direct earned premium for property and casualty insurance
issued by any insurer for insurance against losses occurring at the
locations described in subparagraphs (A) and (B) of paragraph (5).
``(5) Insured loss.--The term `insured loss' means any loss
resulting from an act of terrorism (including an act of war, in the
case of workers' compensation) that is covered by primary or excess
property and casualty insurance issued by an insurer if such loss--
``(A) occurs within the United States; or
``(B) occurs to an air carrier (as defined in section 40102
of title 49, United States Code), to a United States flag vessel
(or a vessel based principally in the United States, on which
United States income tax is paid and whose insurance coverage is
subject to regulation in the United States), regardless of where
the loss occurs, or at the premises of any United States
mission.
``(6) Insurer.--The term `insurer' means any entity, including
any affiliate thereof--
``(A) that is--
``(i) licensed or admitted to engage in the business of
providing primary or excess insurance in any State;
``(ii) not licensed or admitted as described in clause
(i), if it is an eligible surplus line carrier listed on the
Quarterly Listing of Alien Insurers of the NAIC, or any
successor thereto;
``(iii) approved for the purpose of offering property
and casualty insurance by a Federal agency in connection
with maritime, energy, or aviation activity;
``(iv) a State residual market insurance entity or State
workers' compensation fund; or
``(v) any other entity described in section 103(f), to
the extent provided in the rules of the Secretary issued
under section 103(f);
``(B) that receives direct earned premiums for any type of
commercial property and casualty insurance coverage, other than
in the case of entities described in sections 103(d) and 103(f);
and
``(C) that meets any other criteria that the Secretary may
reasonably prescribe.
``(7) Insurer deductible.--The term `insurer deductible' means--
``(A) for the Transition Period, the value of an insurer's
direct earned premiums over the calendar year immediately
preceding the date of enactment of this Act [Nov. 26, 2002],
multiplied by 1 percent;
``(B) for Program Year 1, the value of an insurer's direct
earned premiums over the calendar year immediately preceding
Program Year 1, multiplied by 7 percent;
``(C) for Program Year 2, the value of an insurer's direct
earned premiums over the calendar year immediately preceding
Program Year 2, multiplied by 10 percent;
``(D) for Program Year 3, the value of an insurer's direct
earned premiums over the calendar year immediately preceding
Program Year 3, multiplied by 15 percent; and
``(E) notwithstanding subparagraphs (A) through (D), for the
Transition Period, Program Year 1, Program Year 2, or Program
Year 3, if an insurer has not had a full year of operations
during the calendar year immediately preceding such Period or
Program Year, such portion of the direct earned premiums of the
insurer as the Secretary determines appropriate, subject to
appropriate methodologies established by the Secretary for
measuring such direct earned premiums.
``(8) NAIC.--The term `NAIC' means the National Association of
Insurance Commissioners.
``(9) Person.--The term `person' means any individual, business
or nonprofit entity (including those organized in the form of a
partnership, limited liability company, corporation, or
association), trust or estate, or a State or political subdivision
of a State or other governmental unit.
``(10) Program.--The term `Program' means the Terrorism
Insurance Program established by this title.
``(11) Program years.--
``(A) Transition period.--The term `Transition Period' means
the period beginning on the date of enactment of this Act [Nov.
26, 2002] and ending on December 31, 2002.
``(B) Program year 1.--The term `Program Year 1' means the
period beginning on January 1, 2003 and ending on December 31,
2003.
``(C) Program year 2.--The term `Program Year 2' means the
period beginning on January 1, 2004 and ending on December 31,
2004.
``(D) Program year 3.--The term `Program Year 3' means the
period beginning on January 1, 2005 and ending on December 31,
2005.
``(12) Property and casualty insurance.--The term `property and
casualty insurance'--
``(A) means commercial lines of property and casualty
insurance, including excess insurance, workers' compensation
insurance, and surety insurance; and
``(B) does not include--
``(i) Federal crop insurance issued or reinsured under
the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.), or
any other type of crop or livestock insurance that is
privately issued or reinsured;
``(ii) private mortgage insurance (as that term is
defined in section 2 of the Homeowners Protection Act of
1998 (12 U.S.C. 4901)) or title insurance;
``(iii) financial guaranty insurance issued by monoline
financial guaranty insurance corporations;
``(iv) insurance for medical malpractice;
``(v) health or life insurance, including group life
insurance;
``(vi) flood insurance provided under the National Flood
Insurance Act of 1968 (42 U.S.C. 4001 et seq.); or
``(vii) reinsurance or retrocessional reinsurance.
``(13) Secretary.--The term `Secretary' means the Secretary of
the Treasury.
``(14) State.--The term `State' means any State of the United
States, the District of Columbia, the Commonwealth of Puerto Rico,
the Commonwealth of the Northern Mariana Islands, American Samoa,
Guam, each of the United States Virgin Islands, and any territory or
possession of the United States.
``(15) United states.--The term `United States' means the
several States, and includes the territorial sea and the continental
shelf of the United States, as those terms are defined in the
Violent Crime Control and Law Enforcement Act of 1994 (18 U.S.C.
2280, 2281).
``(16) Rule of construction for dates.--With respect to any
reference to a date in this title, such day shall be construed--
``(A) to begin at 12:01 a.m. on that date; and
``(B) to end at midnight on that date.
``SEC. 103. TERRORISM INSURANCE PROGRAM.
``(a) Establishment of Program.--
``(1) In general.--There is established in the Department of the
Treasury the Terrorism Insurance Program.
``(2) Authority of the secretary.--Notwithstanding any other
provision of State or Federal law, the Secretary shall administer
the Program, and shall pay the Federal share of compensation for
insured losses in accordance with subsection (e).
``(3) Mandatory participation.--Each entity that meets the
definition of an insurer under this title shall participate in the
Program.
``(b) Conditions for Federal Payments.--No payment may be made by
the Secretary under this section with respect to an insured loss that is
covered by an insurer, unless--
``(1) the person that suffers the insured loss, or a person
acting on behalf of that person, files a claim with the insurer;
``(2) the insurer provides clear and conspicuous disclosure to
the policyholder of the premium charged for insured losses covered
by the Program and the Federal share of compensation for insured
losses under the Program--
``(A) in the case of any policy that is issued before the
date of enactment of this Act [Nov. 26, 2002], not later than 90
days after that date of enactment;
``(B) in the case of any policy that is issued within 90
days of the date of enactment of this Act, at the time of offer,
purchase, and renewal of the policy; and
``(C) in the case of any policy that is issued more than 90
days after the date of enactment of this Act, on a separate line
item in the policy, at the time of offer, purchase, and renewal
of the policy;
``(3) the insurer processes the claim for the insured loss in
accordance with appropriate business practices, and any reasonable
procedures that the Secretary may prescribe; and
``(4) the insurer submits to the Secretary, in accordance with
such reasonable procedures as the Secretary may establish--
``(A) a claim for payment of the Federal share of
compensation for insured losses under the Program;
``(B) written certification--
``(i) of the underlying claim; and
``(ii) of all payments made for insured losses; and
``(C) certification of its compliance with the provisions of
this subsection.
``(c) Mandatory Availability.--
``(1) Initial program periods.--During the period beginning on
the first day of the Transition Period and ending on the last day of
Program Year 2, each entity that meets the definition of an insurer
under section 102--
``(A) shall make available, in all of its property and
casualty insurance policies, coverage for insured losses; and
``(B) shall make available property and casualty insurance
coverage for insured losses that does not differ materially from
the terms, amounts, and other coverage limitations applicable to
losses arising from events other than acts of terrorism.
``(2) Program year 3.--Not later than September 1, 2004, the
Secretary shall, based on the factors referred to in section
108(d)(1), determine whether the provisions of subparagraphs (A) and
(B) of paragraph (1) should be extended through Program Year 3.
``(d) State Residual Market Insurance Entities.--
``(1) In general.--The Secretary shall issue regulations, as
soon as practicable after the date of enactment of this Act [Nov.
26, 2002], that apply the provisions of this title to State residual
market insurance entities and State workers' compensation funds.
``(2) Treatment of certain entities.--For purposes of the
regulations issued pursuant to paragraph (1)--
``(A) a State residual market insurance entity that does not
share its profits and losses with private sector insurers shall
be treated as a separate insurer; and
``(B) a State residual market insurance entity that shares
its profits and losses with private sector insurers shall not be
treated as a separate insurer, and shall report to each private
sector insurance participant its share of the insured losses of
the entity, which shall be included in each private sector
insurer's insured losses.
``(3) Treatment of participation in certain entities.--Any
insurer that participates in sharing profits and losses of a State
residual market insurance entity shall include in its calculations
of premiums any premiums distributed to the insurer by the State
residual market insurance entity.
``(e) Insured Loss Shared Compensation.--
``(1) Federal share.--
``(A) In general.--The Federal share of compensation under
the Program to be paid by the Secretary for insured losses of an
insurer during the Transition Period and each Program Year shall
be equal to 90 percent of that portion of the amount of such
insured losses that exceeds the applicable insurer deductible
required to be paid during such Transition Period or such
Program Year.
``(B) Prohibition on duplicative compensation.--The Federal
share of compensation for insured losses under the Program shall
be reduced by the amount of compensation provided by the Federal
Government to any person under any other Federal program for
those insured losses.
``(2) Cap on annual liability.--
``(A) In general.--Notwithstanding paragraph (1) or any
other provision of Federal or State law, if the aggregate
insured losses exceed $100,000,000,000, during the period
beginning on the first day of the Transition Period and ending
on the last day of Program Year 1, or during Program Year 2 or
Program Year 3 (until such time as the Congress may act
otherwise with respect to such losses)--
``(i) the Secretary shall not make any payment under
this title for any portion of the amount of such losses that
exceeds $100,000,000,000; and
``(ii) no insurer that has met its insurer deductible
shall be liable for the payment of any portion of that
amount that exceeds $100,000,000,000.
``(B) Insurer share.--For purposes of subparagraph (A), the
Secretary shall determine the pro rata share of insured losses
to be paid by each insurer that incurs insured losses under the
Program.
``(3) Notice to congress.--The Secretary shall notify the
Congress if estimated or actual aggregate insured losses exceed
$100,000,000,000 during the period beginning on the first day of the
Transition Period and ending on the last day of Program Year 1, or
during Program Year 2 or Program Year 3, and the Congress shall
determine the procedures for and the source of any payments for such
excess insured losses.
``(4) Final netting.--The Secretary shall have sole discretion
to determine the time at which claims relating to any insured loss
or act of terrorism shall become final.
``(5) Determinations final.--Any determination of the Secretary
under this subsection shall be final, unless expressly provided, and
shall not be subject to judicial review.
``(6) Insurance marketplace aggregate retention amount.--For
purposes of paragraph (7), the insurance marketplace aggregate
retention amount shall be--
``(A) for the period beginning on the first day of the
Transition Period and ending on the last day of Program Year 1,
the lesser of--
``(i) $10,000,000,000; and
``(ii) the aggregate amount, for all insurers, of
insured losses during such period;
``(B) for Program Year 2, the lesser of--
``(i) $12,500,000,000; and
``(ii) the aggregate amount, for all insurers, of
insured losses during such Program Year; and
``(C) for Program Year 3, the lesser of--
``(i) $15,000,000,000; and
``(ii) the aggregate amount, for all insurers, of
insured losses during such Program Year.
``(7) Recoupment of federal share.--
``(A) Mandatory recoupment amount.--For purposes of this
paragraph, the mandatory recoupment amount for each of the
periods referred to in subparagraphs (A), (B), and (C) of
paragraph (6) shall be the difference between--
``(i) the insurance marketplace aggregate retention
amount under paragraph (6) for such period; and
``(ii) the aggregate amount, for all insurers, of
insured losses during such period that are not compensated
by the Federal Government because such losses--
``(I) are within the insurer deductible for the insurer
subject to the losses; or
``(II) are within the portion of losses of the insurer that
exceed the insurer deductible, but are not compensated
pursuant to paragraph (1).
``(B) No mandatory recoupment if uncompensated losses exceed
insurance marketplace retention.--Notwithstanding subparagraph
(A), if the aggregate amount of uncompensated insured losses
referred to in clause (ii) of such subparagraph for any period
referred to in subparagraph (A), (B), or (C) of paragraph (6) is
greater than the insurance marketplace aggregate retention
amount under paragraph (6) for such period, the mandatory
recoupment amount shall be $0.
``(C) Mandatory establishment of surcharges to recoup
mandatory recoupment amount.--The Secretary shall collect, for
repayment of the Federal financial assistance provided in
connection with all acts of terrorism (or acts of war, in the
case of workers compensation) occurring during any of the
periods referred to in subparagraph (A), (B), or (C) of
paragraph (6), terrorism loss risk-spreading premiums in an
amount equal to any mandatory recoupment amount for such period.
``(D) Discretionary recoupment of remainder of financial
assistance.--To the extent that the amount of Federal financial
assistance provided exceeds any mandatory recoupment amount, the
Secretary may recoup, through terrorism loss risk-spreading
premiums, such additional amounts that the Secretary believes
can be recouped, based on--
``(i) the ultimate costs to taxpayers of no additional
recoupment;
``(ii) the economic conditions in the commercial
marketplace, including the capitalization, profitability,
and investment returns of the insurance industry and the
current cycle of the insurance markets;
``(iii) the affordability of commercial insurance for
small- and medium-sized businesses; and
``(iv) such other factors as the Secretary considers
appropriate.
``(8) Policy surcharge for terrorism loss risk-spreading
premiums.--
``(A) Policyholder premium.--Any amount established by the
Secretary as a terrorism loss risk-spreading premium shall--
``(i) be imposed as a policyholder premium surcharge on
property and casualty insurance policies in force after the
date of such establishment;
``(ii) begin with such period of coverage during the
year as the Secretary determines appropriate; and
``(iii) be based on a percentage of the premium amount
charged for property and casualty insurance coverage under
the policy.
``(B) Collection.--The Secretary shall provide for insurers
to collect terrorism loss risk-spreading premiums and remit such
amounts collected to the Secretary.
``(C) Percentage limitation.--A terrorism loss risk-
spreading premium (including any additional amount included in
such premium on a discretionary basis pursuant to paragraph
(7)(D)) may not exceed, on an annual basis, the amount equal to
3 percent of the premium charged for property and casualty
insurance coverage under the policy.
``(D) Adjustment for urban and smaller commercial and rural
areas and different lines of insurance.--
``(i) Adjustments.--In determining the method and manner
of imposing terrorism loss risk-spreading premiums,
including the amount of such premiums, the Secretary shall
take into consideration--
``(I) the economic impact on commercial centers of urban
areas, including the effect on commercial rents and
commercial insurance premiums, particularly rents and
premiums charged to small businesses, and the
availability of lease space and commercial insurance
within urban areas;
``(II) the risk factors related to rural areas and smaller
commercial centers, including the potential exposure to
loss and the likely magnitude of such loss, as well as
any resulting cross-subsidization that might result; and
``(III) the various exposures to terrorism risk for different
lines of insurance.
``(ii) Recoupment of adjustments.--Any mandatory
recoupment amounts not collected by the Secretary because of
adjustments under this subparagraph shall be recouped
through additional terrorism loss risk-spreading premiums.
``(E) Timing of premiums.--The Secretary may adjust the
timing of terrorism loss risk-spreading premiums to provide for
equivalent application of the provisions of this title to
policies that are not based on a calendar year, or to apply such
provisions on a daily, monthly, or quarterly basis, as
appropriate.
``(f) Captive Insurers and Other Self-Insurance Arrangements.--The
Secretary may, in consultation with the NAIC or the appropriate State
regulatory authority, apply the provisions of this title, as
appropriate, to other classes or types of captive insurers and other
self-insurance arrangements by municipalities and other entities (such
as workers' compensation self-insurance programs and State workers'
compensation reinsurance pools), but only if such application is
determined before the occurrence of an act of terrorism in which such an
entity incurs an insured loss and all of the provisions of this title
are applied comparably to such entities.
``(g) Reinsurance to Cover Exposure.--
``(1) Obtaining coverage.--This title may not be construed to
limit or prevent insurers from obtaining reinsurance coverage for
insurer deductibles or insured losses retained by insurers pursuant
to this section, nor shall the obtaining of such coverage affect the
calculation of such deductibles or retentions.
``(2) Limitation on financial assistance.--The amount of
financial assistance provided pursuant to this section shall not be
reduced by reinsurance paid or payable to an insurer from other
sources, except that recoveries from such other sources, taken
together with financial assistance for the Transition Period or a
Program Year provided pursuant to this section, may not exceed the
aggregate amount of the insurer's insured losses for such period. If
such recoveries and financial assistance for the Transition Period
or a Program Year exceed such aggregate amount of insured losses for
that period and there is no agreement between the insurer and any
reinsurer to the contrary, an amount in excess of such aggregate
insured losses shall be returned to the Secretary.
``(h) Group Life Insurance Study.--
``(1) Study.--The Secretary shall study, on an expedited basis,
whether adequate and affordable catastrophe reinsurance for acts of
terrorism is available to life insurers in the United States that
issue group life insurance, and the extent to which the threat of
terrorism is reducing the availability of group life insurance
coverage for consumers in the United States.
``(2) Conditional Coverage.--To the extent that the Secretary
determines that such coverage is not or will not be reasonably
available to both such insurers and consumers, the Secretary shall,
in consultation with the NAIC--
``(A) apply the provisions of this title, as appropriate, to
providers of group life insurance; and
``(B) provide such restrictions, limitations, or conditions
with respect to any financial assistance provided that the
Secretary deems appropriate, based on the study under paragraph
(1).
``(i) Study and Report.--
``(1) Study.--The Secretary, after consultation with the NAIC,
representatives of the insurance industry, and other experts in the
insurance field, shall conduct a study of the potential effects of
acts of terrorism on the availability of life insurance and other
lines of insurance coverage, including personal lines.
``(2) Report.--Not later than 9 months after the date of
enactment of this Act [Nov. 26, 2002], the Secretary shall submit a
report to the Congress on the results of the study conducted under
paragraph (1).
``SEC. 104. GENERAL AUTHORITY AND ADMINISTRATION OF CLAIMS.
``(a) General Authority.--The Secretary shall have the powers and
authorities necessary to carry out the Program, including authority--
``(1) to investigate and audit all claims under the Program; and
``(2) to prescribe regulations and procedures to effectively
administer and implement the Program, and to ensure that all
insurers and self-insured entities that participate in the Program
are treated comparably under the Program.
``(b) Interim Rules and Procedures.--The Secretary may issue interim
final rules or procedures specifying the manner in which--
``(1) insurers may file and certify claims under the Program;
``(2) the Federal share of compensation for insured losses will
be paid under the Program, including payments based on estimates of
or actual insured losses;
``(3) the Secretary may, at any time, seek repayment from or
reimburse any insurer, based on estimates of insured losses under
the Program, to effectuate the insured loss sharing provisions in
section 103; and
``(4) the Secretary will determine any final netting of payments
under the Program, including payments owed to the Federal Government
from any insurer and any Federal share of compensation for insured
losses owed to any insurer, to effectuate the insured loss sharing
provisions in section 103.
``(c) Consultation.--The Secretary shall consult with the NAIC, as
the Secretary determines appropriate, concerning the Program.
``(d) Contracts for Services.--The Secretary may employ persons or
contract for services as may be necessary to implement the Program.
``(e) Civil Penalties.--
``(1) In general.--The Secretary may assess a civil monetary
penalty in an amount not exceeding the amount under paragraph (2)
against any insurer that the Secretary determines, on the record
after opportunity for a hearing--
``(A) has failed to charge, collect, or remit terrorism loss
risk-spreading premiums under section 103(e) in accordance with
the requirements of, or regulations issued under, this title;
``(B) has intentionally provided to the Secretary erroneous
information regarding premium or loss amounts;
``(C) submits to the Secretary fraudulent claims under the
Program for insured losses;
``(D) has failed to provide the disclosures required under
subsection (f); or
``(E) has otherwise failed to comply with the provisions of,
or the regulations issued under, this title.
``(2) Amount.--The amount under this paragraph is the greater of
$1,000,000 and, in the case of any failure to pay, charge, collect,
or remit amounts in accordance with this title or the regulations
issued under this title, such amount in dispute.
``(3) Recovery of amount in dispute.--A penalty under this
subsection for any failure to pay, charge, collect, or remit amounts
in accordance with this title or the regulations under this title
shall be in addition to any such amounts recovered by the Secretary.
``(f) Submission of Premium Information.--
``(1) In general.--The Secretary shall annually compile
information on the terrorism risk insurance premium rates of
insurers for the preceding year.
``(2) Access to information.--To the extent that such
information is not otherwise available to the Secretary, the
Secretary may require each insurer to submit to the NAIC terrorism
risk insurance premium rates, as necessary to carry out paragraph
(1), and the NAIC shall make such information available to the
Secretary.
``(3) Availability to congress.--The Secretary shall make
information compiled under this subsection available to the
Congress, upon request.
``(g) Funding.--
``(1) Federal payments.--There are hereby appropriated, out of
funds in the Treasury not otherwise appropriated, such sums as may
be necessary to pay the Federal share of compensation for insured
losses under the Program.
``(2) Administrative expenses.--There are hereby appropriated,
out of funds in the Treasury not otherwise appropriated, such sums
as may be necessary to pay reasonable costs of administering the
Program.
``SEC. 105. PREEMPTION AND NULLIFICATION OF PRE-EXISTING TERRORISM
EXCLUSIONS.
``(a) General Nullification.--Any terrorism exclusion in a contract
for property and casualty insurance that is in force on the date of
enactment of this Act [Nov. 26, 2002] shall be void to the extent that
it excludes losses that would otherwise be insured losses.
``(b) General Preemption.--Any State approval of any terrorism
exclusion from a contract for property and casualty insurance that is in
force on the date of enactment of this Act, shall be void to the extent
that it excludes losses that would otherwise be insured losses.
``(c) Reinstatement of Terrorism Exclusions.--Notwithstanding
subsections (a) and (b) or any provision of State law, an insurer may
reinstate a preexisting provision in a contract for property and
casualty insurance that is in force on the date of enactment of this Act
[Nov. 26, 2002] and that excludes coverage for an act of terrorism
only--
``(1) if the insurer has received a written statement from the
insured that affirmatively authorizes such reinstatement; or
``(2) if--
``(A) the insured fails to pay any increased premium charged
by the insurer for providing such terrorism coverage; and
``(B) the insurer provided notice, at least 30 days before
any such reinstatement, of--
``(i) the increased premium for such terrorism coverage;
and
``(ii) the rights of the insured with respect to such
coverage, including any date upon which the exclusion would
be reinstated if no payment is received.
``SEC. 106. PRESERVATION PROVISIONS.
``(a) State Law.--Nothing in this title shall affect the
jurisdiction or regulatory authority of the insurance commissioner (or
any agency or office performing like functions) of any State over any
insurer or other person--
``(1) except as specifically provided in this title; and
``(2) except that--
``(A) the definition of the term `act of terrorism' in
section 102 shall be the exclusive definition of that term for
purposes of compensation for insured losses under this title,
and shall preempt any provision of State law that is
inconsistent with that definition, to the extent that such
provision of law would otherwise apply to any type of insurance
covered by this title;
``(B) during the period beginning on the date of enactment
of this Act [Nov. 26, 2002] and ending on December 31, 2003,
rates and forms for terrorism risk insurance covered by this
title and filed with any State shall not be subject to prior
approval or a waiting period under any law of a State that would
otherwise be applicable, except that nothing in this title
affects the ability of any State to invalidate a rate as
excessive, inadequate, or unfairly discriminatory, and, with
respect to forms, where a State has prior approval authority, it
shall apply to allow subsequent review of such forms; and
``(C) during the period beginning on the date of enactment
of this Act and for so long as the Program is in effect, as
provided in section 108, including authority in subsection
108(b), books and records of any insurer that are relevant to
the Program shall be provided, or caused to be provided, to the
Secretary, upon request by the Secretary, notwithstanding any
provision of the laws of any State prohibiting or limiting such
access.
``(b) Existing Reinsurance Agreements.--Nothing in this title shall
be construed to alter, amend, or expand the terms of coverage under any
reinsurance agreement in effect on the date of enactment of this Act
[Nov. 26, 2002]. The terms and conditions of such an agreement shall be
determined by the language of that agreement.
``SEC. 107. LITIGATION MANAGEMENT.
``(a) Procedures and Damages.--
``(1) In general.--If the Secretary makes a determination
pursuant to section 102 that an act of terrorism has occurred, there
shall exist a Federal cause of action for property damage, personal
injury, or death arising out of or resulting from such act of
terrorism, which shall be the exclusive cause of action and remedy
for claims for property damage, personal injury, or death arising
out of or relating to such act of terrorism, except as provided in
subsection (b).
``(2) Preemption of state actions.--All State causes of action
of any kind for property damage, personal injury, or death arising
out of or resulting from an act of terrorism that are otherwise
available under State law are hereby preempted, except as provided
in subsection (b).
``(3) Substantive law.--The substantive law for decision in any
such action described in paragraph (1) shall be derived from the
law, including choice of law principles, of the State in which such
act of terrorism occurred, unless such law is otherwise inconsistent
with or preempted by Federal law.
``(4) Jurisdiction.--For each determination described in
paragraph (1), not later than 90 days after the occurrence of an act
of terrorism, the Judicial Panel on Multidistrict Litigation shall
designate 1 district court or, if necessary, multiple district
courts of the United States that shall have original and exclusive
jurisdiction over all actions for any claim (including any claim for
loss of property, personal injury, or death) relating to or arising
out of an act of terrorism subject to this section. The Judicial
Panel on Multidistrict Litigation shall select and assign the
district court or courts based on the convenience of the parties and
the just and efficient conduct of the proceedings. For purposes of
personal jurisdiction, the district court or courts designated by
the Judicial Panel on Multidistrict Litigation shall be deemed to
sit in all judicial districts in the United States.
``(5) Punitive damages.--Any amounts awarded in an action under
paragraph (1) that are attributable to punitive damages shall not
count as insured losses for purposes of this title.
``(b) Exclusion.--Nothing in this section shall in any way limit the
liability of any government, an organization, or person who knowingly
participates in, conspires to commit, aids and abets, or commits any act
of terrorism with respect to which a determination described in
subsection (a)(1) was made.
``(c) Right of Subrogation.--The United States shall have the right
of subrogation with respect to any payment or claim paid by the United
States under this title.
``(d) Relationship to Other Law.--Nothing in this section shall be
construed to affect--
``(1) any party's contractual right to arbitrate a dispute; or
``(2) any provision of the Air Transportation Safety and System
Stabilization Act (Public Law 107-42; 49 U.S.C. 40101 note.).
``(e) Effective Period.--This section shall apply only to actions
described in subsection (a)(1) that arise out of or result from acts of
terrorism that occur or occurred during the effective period of the
Program.
``SEC. 108. TERMINATION OF PROGRAM.
``(a) Termination of Program.--The Program shall terminate on
December 31, 2005.
``(b) Continuing Authority to Pay or Adjust Compensation.--Following
the termination of the Program, the Secretary may take such actions as
may be necessary to ensure payment, recoupment, reimbursement, or
adjustment of compensation for insured losses arising out of any act of
terrorism occurring during the period in which the Program was in effect
under this title, in accordance with the provisions of section 103 and
regulations promulgated thereunder.
``(c) Repeal; Savings Clause.--This title is repealed on the final
termination date of the Program under subsection (a), except that such
repeal shall not be construed--
``(1) to prevent the Secretary from taking, or causing to be
taken, such actions under subsection (b) of this section, paragraph
(4), (5), (6), (7), or (8) of section 103(e), or subsection (a)(1),
(c), (d), or (e) of section 104, as in effect on the day before the
date of such repeal, or applicable regulations promulgated
thereunder, during any period in which the authority of the
Secretary under subsection (b) of this section is in effect; or
``(2) to prevent the availability of funding under section
104(g) during any period in which the authority of the Secretary
under subsection (b) of this section is in effect.
``(d) Study and Report on the Program.--
``(1) Study.--The Secretary, in consultation with the NAIC,
representatives of the insurance industry and of policy holders,
other experts in the insurance field, and other experts as needed,
shall assess the effectiveness of the Program and the likely
capacity of the property and casualty insurance industry to offer
insurance for terrorism risk after termination of the Program, and
the availability and affordability of such insurance for various
policyholders, including railroads, trucking, and public transit.
``(2) Report.--The Secretary shall submit a report to the
Congress on the results of the study conducted under paragraph (1)
not later than June 30, 2005.''
Termination of Trust Territory of the Pacific Islands
For termination of Trust Territory of the Pacific Islands, see note
set out preceding section 1681 of Title 48, Territories and Insular
Possessions.
Section Referred to in Other Sections
This section is referred to in sections 6711, 6713, 6715, 6805 of
this title; title 12 section 1844.
