(Archived Content)
JS-1022
The Treasury Department today announced a proposed regulation under the Terrorism Risk Insurance Act of 2002, which was signed into law by President Bush on November 26, 2002.
Today’s regulation contains procedures for insurers to follow in filing claims for payment of the federal share of compensation for insured losses under the Terrorism Risk Insurance Program. It is the latest in a series of regulations that Treasury has issued throughout the year to implement this program. Insurers and other interested parties will have the opportunity to submit formal comments on the regulation, and the comment period will last for 30 days from the date of the regulation’s publication in the Federal Register.
“The Terrorism Risk Insurance Program plays an important role in strengthening the nation’s economy against the effects of international terrorism” said Treasury Assistant Secretary for Financial Institutions Wayne Abernathy, who oversees the Program. “This temporary backstop for insurers promotes the availability of terrorism risk insurance coverage and encourages the development by the private sector of increasingly available resources for this protection.”
Previously issued regulations laid the groundwork for the program, clarified the program scope, and implemented disclosure requirements of the Act. This proposed rule lays out the requirements and conditions insurers must meet in order to file for federal payment for covered losses. It clarifies elements of insured losses that are to be reimbursed under the Program and establishes fundamental documentation and recordkeeping necessary for insurers to receive the federal share of compensation for terrorism losses.
“Treasury seeks to establish operational procedures that suitably emulate the best practices of the reinsurance industry” added Jeffrey S. Bragg, Executive Director of the Terrorism Risk Insurance Program. “Our goal is to respond quickly to insurer claims for payment while maintaining appropriate financial controls over the use of taxpayer funds.”
The Terrorism Risk Insurance Program is a temporary federal reinsurance program designed to encourage the development of private sector resources and arrangements for managing risk of loss due to acts of international terrorism. The authority for the program expires on December 31, 2005.
Regulations and other information related to the Terrorism Risk Insurance Program can be found at http://www.treasury.gov/trip/.