Data Collection and Comments in Aid of Analyses of the Terrorism Risk Insurance Program, 95310-95312 [2016-31238]
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95310
Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices
Title: REG–121475–03 (TD 9495Final) Qualified Zone Academy Bonds:
Obligations of States and Political
Subdivisions.
Abstract: The regulations that provide
guidance to state and local governments
that issue qualified zone academy bonds
and to banks, insurance companies, and
other taxpayers that hold those bonds
on the program requirements for
qualified zone academy bonds. The final
regulations implement the amendments
to section 1397E and provide guidance
on the maximum term, permissible use
of proceeds, and remedial actions for
qualified zone academy bonds.
Affected Public: State, Local, and
Tribal Governments.
Estimated Total Annual Burden
Hours: 3.
Bob Faber,
Acting Treasury PRA Clearance Officer.
[FR Doc. 2016–31212 Filed 12–23–16; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Data Collection and Comments in Aid
of Analyses of the Terrorism Risk
Insurance Program
Departmental Offices, U.S.
Department of the Treasury.
ACTION: Request for comments.
AGENCY:
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 Program
has been reauthorized on a number of
occasions, most recently in the
Terrorism Risk Insurance Program
Reauthorization Act of 2015. TRIA
requires the Secretary of the Treasury
(Secretary) to perform periodic analyses
of certain matters concerning the
Program. In order to assist the Secretary
with this process, TRIA requires
insurers to submit on an annual basis
certain insurance data and information
regarding participation in the Program.
Treasury requests stakeholder feedback
on the data collection forms proposed
for use in the 2017 data collection
process, pursuant to 31 CFR 50.51(c).
Copies of these forms and associated
explanatory materials are available for
electronic review at https://
www.treasury.gov/resource-center/finmkts/Pages/program.aspx. Treasury also
asabaliauskas on DSK3SPTVN1PROD with NOTICES
SUMMARY:
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seeks comments from interested parties
on issues that Treasury will be
analyzing in connection with its next
report concerning the Program, which
will address the participation of small
insurers in the Program, including any
competitive challenges such insurers
face in the terrorism risk insurance
marketplace.
DATES: Submit comments on or before
February 27, 2017.
ADDRESSES: Submit comments
electronically through the Federal
eRulemaking Portal: https://
www.regulations.gov, or by mail to the
Federal Insurance Office, Attn: Richard
Ifft, Room 1140 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
proposed data collection forms should
be captioned with ‘‘2017 TRIA Data
Collection Form Comments.’’ Comments
addressing the participation of small
insurers in the Program should be
captioned with ‘‘2017 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 tollfree number), Kevin Meehan, Senior
Insurance Regulatory Policy Analyst,
Federal Insurance Office, at (202) 622–
7009 (not a toll-free number), or Lindsey
Baldwin, Senior Policy Analyst, Federal
Insurance Office, at (202) 622–3220 (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
TRIA 1 directs the Secretary,
beginning in calendar year 2016, to
‘‘require insurers participating in the
Program to submit to the Secretary such
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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Frm 00213
Fmt 4703
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information regarding insurance
coverage for terrorism losses of such
insurers as the Secretary considers
appropriate to analyze the effectiveness
of the Program[.]’’ 2 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.
31 CFR 50.51 outlines the data
collection process and requires insurers
to submit the specified data and
information relating to Program
participation no later than May 15 of
each calendar year. Treasury, through
an insurance statistical aggregator,
intends to establish a web portal,
through which insurers will be able to
submit the requested data. All
information submitted via the web
portal will be subject to the
confidentiality and data protection
provisions of applicable Federal law.
The first year of data collection under
Section 104(h) was 2016. In March
2016, Treasury requested that
participating insurers voluntarily
submit 2015 insurance data.3 This was
done to ensure that Treasury data
collection was both limited and
meaningful. This voluntary collection
identified the types of data and
information sought by Treasury, and
provided insurers with time to make
adjustments to ease the burden of
compliance with subsequent mandatory
data collections. The collection
templates proposed for use in calendar
year 2017 follow from the form created
for use in calendar year 2016, although
certain changes have been made due to
experience developed through the 2016
voluntary data call.
In addition, Section 108(h) of TRIA
requires the Secretary to conduct, by
June 30, 2017, a study of small insurers
(to be defined by regulation 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. Treasury’s rules provide
for the collection of data in connection
with these small insurers (31 CFR
50.52), and Treasury has also identified
several questions regarding the role of
small insurers in the Program, to which
comments are sought for use in the
study that Treasury must conduct
2 TRIA
3 81
E:\FR\FM\27DEN1.SGM
sec. 104(h).
FR 11649 (Mar. 4, 2016).
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Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices
concerning the participation of such
insurers in the Program.
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II. Data Collection Templates: Request
for Comments
Pursuant to Section 104(h)(4) of TRIA,
Treasury has determined that the
needed information will not be available
in a timely or meaningful manner from
other sources. Accordingly, Treasury is
requesting certain data and information
directly from insurers, and will
continue to work with publiclyavailable sources to gather additional
information.
Based on feedback received following
the voluntary 2016 data collection, and
pursuant to 31 CFR 50.51(c), Treasury
proposes to use four different data
collection templates for future data
collection. Insurers will fill out the
template identified ‘‘Insurer (NonSmall) Groups or Companies,’’ unless
the insurer meets the definition of a
small insurer, captive insurer, or alien
surplus lines insurer as set forth in 31
CFR 50.4. These insurers will be
required to complete different and
separate forms that have been more
specifically tailored to their operations.
Each form is accompanied by a separate
‘‘data dictionary’’ applicable to the
form, in which specific instructions
concerning each data element are
provided.
Small insurers are defined in 31 CFR
50.4(z) as insurers (or an affiliated group
of insurers) whose policyholder surplus
for the immediately preceding year is
less than five times the Program Trigger
amount 4 for the current year, and
whose TRIP-eligible lines direct earned
premium for the previous year is also
five times less than the Program Trigger
amount. For the 2017 data collection,
which is otherwise requesting
information from calendar year 2016,
this will require an insurer to have 2015
policyholder surplus and 2015 direct
earned premium of less than
$600,000,000 (or five times the 2016
Program Trigger of $120,000,000). In
addition, and at least for purposes of
data collection in calendar year 2017, to
the extent a small insurer had less than
$10,000,000 in TRIP-eligible lines direct
earned premium in calendar year 2016,
such insurer is not required to provide
data. This $10,000,000 threshold is
designed to further reduce the burden
on small insurers that write only small
4 The Program Trigger amount is the amount of
aggregate industry insured losses that must be
exceeded before any Federal payments are made,
even if a particular participating insurer has
exceeded its deductible. See 31 CFR 50.4(p) and (v).
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amounts of TRIP-eligible lines
insurance.5
Captive insurers are defined in 31
CFR 50.4(g) as insurers licensed under
the captive insurance laws or
regulations of any state. All captive
insurers as defined, regardless of size,
are required to complete the captive
insurer template if the captive insurer
writes some amount of terrorism risk
insurance subject to the Program. To the
extent a captive insurer writes policies
in TRIP-eligible lines of insurance, but
does not actually provide its insureds
with any terrorism risk insurance
subject to the Program, the captive
insurer is not required to provide data.
Alien surplus lines insurers are
defined in 31 CFR 50.4(o)(1)(i)(B) as
insurers not licensed or admitted to
engage in the business of providing
primary or excess insurance in any
state, but that are eligible surplus line
insurers listed on the NAIC Quarterly
Listing of Alien Insurers. To the extent
an alien surplus lines insurer is part of
a larger group that is subject to reporting
under either the ‘‘Insurer (Non-Small)
Groups or Companies’’ or ‘‘Small
Insurers’’ template, the information for
that alien surplus lines insurer should
be reported as part of the larger group,
using the proper template. The ‘‘Alien
Surplus Lines’’ template is to be used by
any other alien surplus lines insurer,
regardless of size, that is not part of a
larger group. Such alien surplus lines
insurers must report, at least for
calendar year 2017, even if they fall
within the $10,000,000 premium
threshold otherwise required for small
insurers to report.
Insurers will be required to complete
these forms online through a web portal
that will be established for the calendar
year 2017 collection, the link for which
will be provided at a later date.
Reporting for all Program participants
for calendar year 2017 is mandatory,
unless an insurer falls within the
exceptions for certain small insurers
and captive insurers as identified above.
As was the case with the voluntary data
call in calendar year 2016, Treasury
intends to provide training and make
available additional resources for
insurers with questions during the data
process about proper completion of the
forms. To ensure efficient and accurate
completion of the forms by affected
insurers, Treasury is requesting the
public’s feedback on the content of
5 To the extent an insurer with this level of TRIPeligible lines direct earned premium is part of a
larger group that is required to report, the
experience of this insurer, even if it is under the
$10,000,000 direct earned premium threshold, must
be reported in connection with the appropriate form
for the group as a whole.
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95311
these forms, which are now available
through the Web site listed above.
III. Solicitation for Comments on Small
Insurer Participation in the Program
Section 108(h) of TRIA requires the
Secretary to conduct a study to identify
any competitive challenges that small
insurers, as now defined in 31 CFR
50.4(z), participating in the Program
face in the terrorism risk insurance
marketplace. As discussed above,
Treasury will be collecting certain data
from small insurers in calendar year
2017 which will be used in connection
with the study. In addition, Treasury
also requests comments concerning the
participation of small insurers in the
Program. Treasury welcomes comments
concerning small insurer participation
in the Program generally, and invites
responses to the following particular
issues:
(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.
IV. Procedural Requirements
Paperwork Reduction Act. The
collection of information contained in
this notice has been submitted to the
Office of Management and Budget
(OMB) for review under the
requirements of the Paperwork
Reduction Act, 44 U.S.C. 3507(d).
Organizations and individuals desiring
to submit comments concerning the
collection of information in the notice
should direct them to: Office of
Management and Budget, Attn: Desk
Officer for the Department of the
Treasury, Office of Information and
Regulatory Affairs, Washington, DC
20503. A copy of the comments should
also be sent to Treasury at the addresses
previously specified. Comments on the
collection of information should be
received by February 27, 2017.
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Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices
Treasury specifically invites
comments on: (a) Whether the proposed
collection is responsive to the statutory
requirement; (b) the accuracy of the
estimate of the burden of the collections
of information (see below); (c) ways to
enhance the quality, utility, and clarity
of the information collection; (d) ways
to use automated collection techniques
or other forms of information
technology; and (e) estimates of capital
or start-up costs and costs of operation,
maintenance, and purchase of services
to maintain the information.
Comments are being sought with
respect to the collection of information
in connection with data collection.
Treasury previously analyzed the
potential burdens associated with the
data collection process. See 81 FR 18950
(April 1, 2016). As explained
previously, the data collection rules
propose a mandatory annual data
collection process (beginning in 2017)
which will continue from year to year
as the Program remains in effect. The
information sought by Treasury will
comprise data elements that insurers
currently collect or generate, although
not necessarily grouped together the
way in which insurers currently collect
and evaluate the data. Treasury
currently anticipates that approximately
100 Program participants will be
required to submit the ‘‘Insurer (NonSmall) Groups or Companies’’ data
collection form, 300 Program
participants will submit the ‘‘Small
Insurer’’ form, 400 Program participants
will submit the ‘‘Captive Insurer’’ form,
and 75 Program participants will submit
the ‘‘Alien Surplus Lines Insurers’’
form.
Each set of data collection forms is
expected to incur a different level of
burden. Treasury anticipates
approximately 75 hours will be required
to collect, process, and report the data
for each Insurer (Non-Small) Group or
Company, approximately 25 hours to
collect, process, and report data for each
Small Insurer, and approximately 50
hours to collect, process, and report data
for each Captive Insurer and Alien
Surplus Lines Insurer.
Assuming this breakdown, the
estimated annual burden would be
38,750 hours (100 insurers × 75 hours +
300 insurers × 25 hours + 400 insurers
× 50 hours + 75 insurers × 50 hours). At
a blended, fully loaded hourly rate of
$85, the cost would be $3,293,750
across the industry as a whole, or $6,375
per Insurer (Non-Small) Group or
Company, $2,125 per Small Insurer, and
$4,250 per Captive Insurer or Alien
Surplus Lines Insurer.
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Dated: December 20, 2016.
Michael T. McRaith,
Director, Federal Insurance Office.
[FR Doc. 2016–31238 Filed 12–23–16; 8:45 am]
BILLING CODE 4810–25–P
DEPARTMENT OF THE TREASURY
Guidance Concerning Stand-Alone
Cyber Liability Insurance Policies
Under the Terrorism Risk Insurance
Program
Department of the Treasury,
Departmental Offices.
ACTION: Notice of guidance.
AGENCY:
This notice provides guidance
(Guidance) concerning the Terrorism
Risk Insurance Program (Program) under
the Terrorism Risk Insurance Act of
2002, as amended (‘‘TRIA’’ or ‘‘the
Act’’). In this notice, the Department of
the Treasury (Treasury) provides
guidance regarding how insurance
recently classified as ‘‘Cyber Liability’’
for purposes of reporting premiums and
losses to state insurance regulators will
be treated under TRIA and Treasury’s
regulations for the Program (Program
regulations).
DATES: December 27, 2016.
FOR FURTHER INFORMATION CONTACT:
Richard Ifft, Senior Insurance
Regulatory Policy Analyst, Federal
Insurance Office, 202–622–2922 (not a
toll free number), Kevin Meehan, Senior
Insurance Regulatory Policy Analyst,
Federal Insurance Office, 202–622–7009
(not a toll free number), or Lindsey
Baldwin, Senior Policy Analyst, Federal
Insurance Office, 202–622–3220 (not a
toll free number).
SUPPLEMENTARY INFORMATION:
This Guidance addresses the
application of certain provisions of
TRIA 1 and the Program regulations 2
with respect to certain insurance
policies covering cyber-related risks.
This Guidance may be relied upon by
the members of the public unless
superseded by subsequent amendments
to the Program regulations, or by
subsequent guidance.
SUMMARY:
I. Background
TRIA was enacted following the
attacks on September 11, 2001, to
address disruptions in the market for
terrorism risk insurance, to help ensure
the continued availability and
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 below by the sections of the
law.
2 31 CFR part 50.
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Fmt 4703
Sfmt 4703
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. TRIA requires insurers to ‘‘make
available’’ terrorism risk insurance for
commercial property and casualty losses
resulting from certified acts of terrorism
(insured losses), and provides for shared
public and private compensation for
such insured losses. The Secretary of
the Treasury (Secretary) administers the
Program; pursuant to the Dodd-Frank
Wall Street Reform and Consumer
Protection Act, the Federal Insurance
Office assists the Secretary in
administering the Program.3 The
Program has been reauthorized three
times, most recently on January 12,
2015, when President Obama signed
into law the Terrorism Risk Insurance
Program Reauthorization Act of 2015,
extending the Program until December
31, 2020.4
TRIA requires participating insurers
to ‘‘make available’’ terrorism risk
insurance in connection with ‘‘property
and casualty insurance’’ as defined in
the Act.5 By regulation, Treasury has
further defined ‘‘property and casualty
insurance’’ by reference to the
classification of certain lines of
commercial insurance set forth in the
National Association of Insurance
Commissioner’s Exhibit of Premiums
and Losses (commonly known as
Statutory Page 14).6 Pursuant to the
Program regulations, insurance reported
on Statutory Page 14 under ‘‘Line 17—
Other Liability’’ is generally subject to
TRIP. However, insurance reported on
that page as ‘‘Professional Errors and
Omissions Liability Insurance,’’ a subline within ‘‘Other Liability’’ for state
regulatory purposes, is expressly
excluded from TRIP by the Act.7 Under
the Program regulations, ‘‘professional
liability insurance’’ is defined
consistently with ‘‘Professional Errors
and Omissions Liability Insurance’’ as
that term is defined for state law
purposes.8
Cyber risk insurance is a broad term
that includes insurance products
covering risks arising ‘‘from the use of
3 31
U.S.C. 313(c)(1)(D).
Law 114–1, 129 Stat. 3.
5 TRIA sec. 103(c) (‘‘make available’’
requirement); id., sec. 102(11) (definition of
‘‘property and casualty insurance’’).
6 31 CFR 50.4(w).
7 TRIA sec. 102(11)(xi) (excluding ‘‘professional
liability insurance’’); see also 31 CFR 50.4(w)(2)(xi).
8 31 CFR 50.4(t); compare National Association of
Insurance Commissioners, Uniform Property &
Casualty Product Coding Matrix (Effective January
1, 2016) (NAIC 2016 P/C Product Coding Matrix),
p. 9, available at https://www.naic.org/documents/
industry_pcm_p_c_2016.pdf.
4 Public
E:\FR\FM\27DEN1.SGM
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Agencies
[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)]
[Notices]
[Pages 95310-95312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31238]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Data Collection and Comments in Aid of Analyses of the Terrorism
Risk Insurance Program
AGENCY: Departmental Offices, U.S. Department of the Treasury.
ACTION: Request for comments.
-----------------------------------------------------------------------
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 Program has been reauthorized on a number of
occasions, most recently in the Terrorism Risk Insurance Program
Reauthorization Act of 2015. TRIA requires the Secretary of the
Treasury (Secretary) to perform periodic analyses of certain matters
concerning the Program. In order to assist the Secretary with this
process, TRIA requires insurers to submit on an annual basis certain
insurance data and information regarding participation in the Program.
Treasury requests stakeholder feedback on the data collection forms
proposed for use in the 2017 data collection process, pursuant to 31
CFR 50.51(c). Copies of these forms and associated explanatory
materials are available for electronic review at https://www.treasury.gov/resource-center/fin-mkts/Pages/program.aspx. Treasury
also seeks comments from interested parties on issues that Treasury
will be analyzing in connection with its next report concerning the
Program, which will address the participation of small insurers in the
Program, including any competitive challenges such insurers face in the
terrorism risk insurance marketplace.
DATES: Submit comments on or before February 27, 2017.
ADDRESSES: Submit comments electronically through the Federal
eRulemaking Portal: https://www.regulations.gov, or by mail to the
Federal Insurance Office, Attn: Richard Ifft, Room 1140 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 proposed data collection forms should be
captioned with ``2017 TRIA Data Collection Form Comments.'' Comments
addressing the participation of small insurers in the Program should be
captioned with ``2017 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), Kevin Meehan,
Senior Insurance Regulatory Policy Analyst, Federal Insurance Office,
at (202) 622-7009 (not a toll-free number), or Lindsey Baldwin, Senior
Policy Analyst, Federal Insurance Office, at (202) 622-3220 (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
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[.]'' \2\ 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.
---------------------------------------------------------------------------
\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.
\2\ TRIA sec. 104(h).
---------------------------------------------------------------------------
31 CFR 50.51 outlines the data collection process and requires
insurers to submit the specified data and information relating to
Program participation no later than May 15 of each calendar year.
Treasury, through an insurance statistical aggregator, intends to
establish a web portal, through which insurers will be able to submit
the requested data. All information submitted via the web portal will
be subject to the confidentiality and data protection provisions of
applicable Federal law.
The first year of data collection under Section 104(h) was 2016. In
March 2016, Treasury requested that participating insurers voluntarily
submit 2015 insurance data.\3\ This was done to ensure that Treasury
data collection was both limited and meaningful. This voluntary
collection identified the types of data and information sought by
Treasury, and provided insurers with time to make adjustments to ease
the burden of compliance with subsequent mandatory data collections.
The collection templates proposed for use in calendar year 2017 follow
from the form created for use in calendar year 2016, although certain
changes have been made due to experience developed through the 2016
voluntary data call.
---------------------------------------------------------------------------
\3\ 81 FR 11649 (Mar. 4, 2016).
---------------------------------------------------------------------------
In addition, Section 108(h) of TRIA requires the Secretary to
conduct, by June 30, 2017, a study of small insurers (to be defined by
regulation 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.
Treasury's rules provide for the collection of data in connection with
these small insurers (31 CFR 50.52), and Treasury has also identified
several questions regarding the role of small insurers in the Program,
to which comments are sought for use in the study that Treasury must
conduct
[[Page 95311]]
concerning the participation of such insurers in the Program.
II. Data Collection Templates: Request for Comments
Pursuant to Section 104(h)(4) of TRIA, Treasury has determined that
the needed information will not be available in a timely or meaningful
manner from other sources. Accordingly, Treasury is requesting certain
data and information directly from insurers, and will continue to work
with publicly-available sources to gather additional information.
Based on feedback received following the voluntary 2016 data
collection, and pursuant to 31 CFR 50.51(c), Treasury proposes to use
four different data collection templates for future data collection.
Insurers will fill out the template identified ``Insurer (Non-Small)
Groups or Companies,'' unless the insurer meets the definition of a
small insurer, captive insurer, or alien surplus lines insurer as set
forth in 31 CFR 50.4. These insurers will be required to complete
different and separate forms that have been more specifically tailored
to their operations. Each form is accompanied by a separate ``data
dictionary'' applicable to the form, in which specific instructions
concerning each data element are provided.
Small insurers are defined in 31 CFR 50.4(z) as insurers (or an
affiliated group of insurers) whose policyholder surplus for the
immediately preceding year is less than five times the Program Trigger
amount \4\ for the current year, and whose TRIP-eligible lines direct
earned premium for the previous year is also five times less than the
Program Trigger amount. For the 2017 data collection, which is
otherwise requesting information from calendar year 2016, this will
require an insurer to have 2015 policyholder surplus and 2015 direct
earned premium of less than $600,000,000 (or five times the 2016
Program Trigger of $120,000,000). In addition, and at least for
purposes of data collection in calendar year 2017, to the extent a
small insurer had less than $10,000,000 in TRIP-eligible lines direct
earned premium in calendar year 2016, such insurer is not required to
provide data. This $10,000,000 threshold is designed to further reduce
the burden on small insurers that write only small amounts of TRIP-
eligible lines insurance.\5\
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\4\ The Program Trigger amount is the amount of aggregate
industry insured losses that must be exceeded before any Federal
payments are made, even if a particular participating insurer has
exceeded its deductible. See 31 CFR 50.4(p) and (v).
\5\ To the extent an insurer with this level of TRIP-eligible
lines direct earned premium is part of a larger group that is
required to report, the experience of this insurer, even if it is
under the $10,000,000 direct earned premium threshold, must be
reported in connection with the appropriate form for the group as a
whole.
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Captive insurers are defined in 31 CFR 50.4(g) as insurers licensed
under the captive insurance laws or regulations of any state. All
captive insurers as defined, regardless of size, are required to
complete the captive insurer template if the captive insurer writes
some amount of terrorism risk insurance subject to the Program. To the
extent a captive insurer writes policies in TRIP-eligible lines of
insurance, but does not actually provide its insureds with any
terrorism risk insurance subject to the Program, the captive insurer is
not required to provide data.
Alien surplus lines insurers are defined in 31 CFR 50.4(o)(1)(i)(B)
as insurers not licensed or admitted to engage in the business of
providing primary or excess insurance in any state, but that are
eligible surplus line insurers listed on the NAIC Quarterly Listing of
Alien Insurers. To the extent an alien surplus lines insurer is part of
a larger group that is subject to reporting under either the ``Insurer
(Non-Small) Groups or Companies'' or ``Small Insurers'' template, the
information for that alien surplus lines insurer should be reported as
part of the larger group, using the proper template. The ``Alien
Surplus Lines'' template is to be used by any other alien surplus lines
insurer, regardless of size, that is not part of a larger group. Such
alien surplus lines insurers must report, at least for calendar year
2017, even if they fall within the $10,000,000 premium threshold
otherwise required for small insurers to report.
Insurers will be required to complete these forms online through a
web portal that will be established for the calendar year 2017
collection, the link for which will be provided at a later date.
Reporting for all Program participants for calendar year 2017 is
mandatory, unless an insurer falls within the exceptions for certain
small insurers and captive insurers as identified above. As was the
case with the voluntary data call in calendar year 2016, Treasury
intends to provide training and make available additional resources for
insurers with questions during the data process about proper completion
of the forms. To ensure efficient and accurate completion of the forms
by affected insurers, Treasury is requesting the public's feedback on
the content of these forms, which are now available through the Web
site listed above.
III. Solicitation for Comments on Small Insurer Participation in the
Program
Section 108(h) of TRIA requires the Secretary to conduct a study to
identify any competitive challenges that small insurers, as now defined
in 31 CFR 50.4(z), participating in the Program face in the terrorism
risk insurance marketplace. As discussed above, Treasury will be
collecting certain data from small insurers in calendar year 2017 which
will be used in connection with the study. In addition, Treasury also
requests comments concerning the participation of small insurers in the
Program. Treasury welcomes comments concerning small insurer
participation in the Program generally, and invites responses to the
following particular issues:
(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.
IV. Procedural Requirements
Paperwork Reduction Act. The collection of information contained in
this notice has been submitted to the Office of Management and Budget
(OMB) for review under the requirements of the Paperwork Reduction Act,
44 U.S.C. 3507(d). Organizations and individuals desiring to submit
comments concerning the collection of information in the notice should
direct them to: Office of Management and Budget, Attn: Desk Officer for
the Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503. A copy of the comments should also be
sent to Treasury at the addresses previously specified. Comments on the
collection of information should be received by February 27, 2017.
[[Page 95312]]
Treasury specifically invites comments on: (a) Whether the proposed
collection is responsive to the statutory requirement; (b) the accuracy
of the estimate of the burden of the collections of information (see
below); (c) ways to enhance the quality, utility, and clarity of the
information collection; (d) ways to use automated collection techniques
or other forms of information technology; and (e) estimates of capital
or start-up costs and costs of operation, maintenance, and purchase of
services to maintain the information.
Comments are being sought with respect to the collection of
information in connection with data collection.
Treasury previously analyzed the potential burdens associated with
the data collection process. See 81 FR 18950 (April 1, 2016). As
explained previously, the data collection rules propose a mandatory
annual data collection process (beginning in 2017) which will continue
from year to year as the Program remains in effect. The information
sought by Treasury will comprise data elements that insurers currently
collect or generate, although not necessarily grouped together the way
in which insurers currently collect and evaluate the data. Treasury
currently anticipates that approximately 100 Program participants will
be required to submit the ``Insurer (Non-Small) Groups or Companies''
data collection form, 300 Program participants will submit the ``Small
Insurer'' form, 400 Program participants will submit the ``Captive
Insurer'' form, and 75 Program participants will submit the ``Alien
Surplus Lines Insurers'' form.
Each set of data collection forms is expected to incur a different
level of burden. Treasury anticipates approximately 75 hours will be
required to collect, process, and report the data for each Insurer
(Non-Small) Group or Company, approximately 25 hours to collect,
process, and report data for each Small Insurer, and approximately 50
hours to collect, process, and report data for each Captive Insurer and
Alien Surplus Lines Insurer.
Assuming this breakdown, the estimated annual burden would be
38,750 hours (100 insurers x 75 hours + 300 insurers x 25 hours + 400
insurers x 50 hours + 75 insurers x 50 hours). At a blended, fully
loaded hourly rate of $85, the cost would be $3,293,750 across the
industry as a whole, or $6,375 per Insurer (Non-Small) Group or
Company, $2,125 per Small Insurer, and $4,250 per Captive Insurer or
Alien Surplus Lines Insurer.
Dated: December 20, 2016.
Michael T. McRaith,
Director, Federal Insurance Office.
[FR Doc. 2016-31238 Filed 12-23-16; 8:45 am]
BILLING CODE 4810-25-P