Terrorism Risk Insurance Extension Act of 2005
Latest Action
Became Public Law No: 109-144.
Official Summary
Terrorism Risk Insurance Extension Act of 2005 - Amends the Terrorism Risk Insurance Act of 2002 to extend the terrorism risk insurance program from 2005 through 2007. Raises the property and casualty insurance loss threshold that qualifies for certification by the Secretary of the Treasury as an act of terrorism with respect to Program Year 4 and Program Year 5. Defines Program Year 5 as ending on December 31, 2007. Excludes from covered lines of insurance: (1) commercial automobile insurance; (2) burglary and theft insurance; (3) surety insurance; (4) professional liability insurance; and (5) farm owners multiple peril insurance. Prescribes formulae for insurer deductibles for Program Years 4 and 5. Sets the federal share of insured loss compensation for Program Year 5 at 85% (Year 4 is currently 90%) of the amount of insured losses exceeding the applicable insurer deductible. Specifies for Program Years 4 and 5 increasing maximum aggregate retention amounts in the formula for mandatory recoupment of the federal share of insured loss compensation paid. States that procedures and requirements for advance approval of settlements established by the Secretary are applicable to any cause of action for damages in connection with a determination by the Secretary that an act of terrorism has occurred. Directs the President's Working Group on Financial Markets to analyze and report to certain congressional committees on the long-term availability and affordability of insurance for terrorism risk, including: (1) group life coverage; and (2) coverage for chemical, nuclear, biological, and radiological events.
GovScope Watchdog™
AI Government Intelligence™The Terrorism Risk Insurance Extension Act of 2005 amends the original 2002 Act to extend the federal terrorism risk insurance program through the end of 2007. It raises the loss threshold for terrorism certification by the Treasury Secretary for Program Years 4 and 5, defines Program Year 5 as ending December 31, 2007, and excludes certain insurance lines from coverage. The bill adjusts insurer deductibles and reduces the federal share of compensation for insured losses from 90% to 85% in Program Year 5. It also establishes increasing maximum aggregate retention amounts for mandatory recoupment of federal payments and applies advance approval procedures for settlements related to certified acts of terrorism. Additionally, it directs the President's Working Group on Financial Markets to analyze and report on the long-term availability and affordability of terrorism risk insurance, including coverage for group life and chemical, nuclear, biological, and radiological events.
This law extends and modifies the federal terrorism risk insurance program through 2007, adjusting coverage thresholds, federal compensation shares, and oversight mechanisms to manage terrorism-related insurance risks.
- Extends the terrorism risk insurance program from 2005 through 2007.
- Raises the property and casualty insurance loss threshold for terrorism certification for Program Years 4 and 5.
- Excludes specific insurance lines such as commercial automobile, burglary and theft, surety, professional liability, and farm owners multiple peril insurance from coverage.
- Reduces the federal share of insured loss compensation from 90% to 85% for Program Year 5.
- Directs a report on the long-term availability and affordability of terrorism risk insurance, including coverage for chemical, nuclear, biological, and radiological events.
['Property and casualty insurers participating in the terrorism risk insurance program', 'Policyholders of covered insurance lines', 'The Department of the Treasury through defined certification and oversight roles', "The President's Working Group on Financial Markets tasked with analysis and reporting"]
['Adjusting the federal share of compensation and insurer deductibles may affect insurer risk exposure and market stability.', 'Excluding certain insurance lines could leave gaps in terrorism risk coverage for some policyholders.', 'The requirement for advance approval of settlements may impact the timeliness and flexibility of claims resolution.', 'The long-term availability and affordability of terrorism risk insurance remain uncertain, necessitating ongoing analysis.']
This bill amends the original Terrorism Risk Insurance Act of 2002, reflecting congressional efforts to maintain a federal backstop for terrorism-related insurance losses following the 9/11 attacks. The extension through 2007 and adjustments to program parameters indicate legislative intent to continue federal involvement while modifying risk-sharing arrangements with insurers. The bill was enacted as Public Law No: 109-144 on December 22, 2005.
High concern review — 3 hidden impact flags detected
GovScope reviewed 3 policy-risk categories. Hover for a quick definition. Click detected flags for bill-specific details.
['Potential shifts in insurance market dynamics due to changes in federal cost-sharing and coverage exclusions.', 'Possible increased demand for private terrorism risk insurance products outside the federal program scope.', 'Enhanced federal oversight and reporting may influence future legislative or regulatory adjustments to terrorism risk insurance.']
The bill extends a federally backed terrorism risk insurance program with modifications to coverage thresholds, cost-sharing, and oversight. Transparency considerations include monitoring the impact of coverage exclusions on policyholders, evaluating the effects of reduced federal compensation on insurer behavior, and ensuring the President's Working Group provides comprehensive analysis on long-term insurance availability and affordability. The absence of the full bill text limits detailed assessment of specific enforcement or procedural provisions.
GovScope Intelligence Roadmap
Future bill intelligence will connect sponsors, committee referrals, related votes, campaign finance, disclosures, and stock trades into one legislative intelligence view.