National Terrorism Reinsurance Fund Act
Key claim: This Senate bill would have had the Commerce Department create a tax-exempt National Terrorism Reinsurance Fund to backstop property-and-casualty insurers for terrorism losses, require those insurers to cover terrorism, and let states credit that federal reinsurance.
Abstract
(S1743 · 107th Congress) National Terrorism Reinsurance Fund Act - Directs the Secretary of Commerce to establish: (1) a reinsurance program for participating insurers for losses due to acts of terrorism; (2) a National Terrorism Reinsurance Fund (including minimum underwriting standards for participating insurers); and (3) a special committee to monitor terrorism insurance rates. Prescribes guidelines under which the Fund shall provide reinsurance for losses resulting from acts of terrorism covered by reinsurance contracts between the Fund and participating insurers. Requires the Secretary to determine if a loss is attributable to terrorism. Mandates: (1) coverage by property and casualty insurers for acts of terrorism; and (2) State credit for reinsurance obtained by an insurer from the Fund. Exempts the Fund from State, Federal and local taxes; and State laws pertaining to the insurance industry (other than State unfair trade practice laws). Latest action (2002-06-17): Sponsor introductory remarks on measure. (CR S5626-5627)
Why this matters
The bill represents an early, unenacted Congressional attempt to address the post-9/11 terrorism reinsurance gap by creating a standing federal fund inside Commerce rather than the Treasury-run loss-sharing backstop that Congress ultimately enacted as TRIA. Documenting it clarifies the design space for federal terrorism reinsurance and the path not taken on mandatory insurer coverage and state credit for federal reinsurance.