Terrorism Risk Insurance Program (Treasury regulations implementing TRIA: definitions, disclosures, mandatory availability, certification, federal share, cap on annual liability)

What this document is

31 C.F.R. Part 50 - Terrorism Risk Insurance Program (Treasury regulations implementing TRIA: definitions, disclosures, mandatory availability, certification, federal share, cap on annual liability) is a regulation published by Department of the Treasury (Federal Insurance Office / Terrorism Risk Insurance Program); Office of the Federal Register / National Archives (Electronic Code of Federal Regulations, eCFR). It is one of the documents that insurance license exam questions are written from, including property & casualty practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

• 31 C.F.R. § 50.20(a) (General mandatory availability requirements)

  “(a) General requirements. Under section 103(c) of the Act, an insurer must: (1) Make available, in all of its property and casualty insurance policies, coverage for insured losses; and (2) Make available property and casualty insurance coverage for insured losses that does not differ materially...”

• 31 C.F.R. § 50.14 (Separate line item)

  “§ 50.14 Separate line item. An insurer is deemed to be in compliance with the requirement of providing disclosure on a “separate line item in the policy” under § 50.10(b) if the insurer makes the disclosure: (a) On the declarations page of the policy; (b) Elsewhere within the policy itself; or (c)...”

• 31 C.F.R. § 50.104 (Subrogation)

  “§ 50.104 Subrogation. An insurer shall not waive its rights of subrogation under its property and casualty insurance policy with respect to any losses the payment of which the insurer intends to include in its insurer deductible or the aggregate insured losses for purposes of calculating the...”

• 31 C.F.R. § 50.102(a) (Advance approval of settlements)

  “(a) Mandatory submission of settlements for advance approval. Pursuant to section 107(a)(6) of the Act, an insurer shall submit to Treasury for advance approval any proposed agreement to settle or compromise any Federal cause of action for property damage, personal injury, or death, asserted by a...”

• 31 C.F.R. § 50.4(b)(2) (Definitions, Act of terrorism, Limitations)

  “(2) Limitations. The Secretary is not authorized to certify an act as an act of terrorism if: (i) The act is committed as part of the course of a war declared by the Congress (except with respect to any coverage for workers' compensation); or (ii) Property and casualty insurance losses resulting...”

• 31 C.F.R. § 50.4(n)(3)(i) (Insured loss)

  “(3) The term insured loss does not include: (i) Punitive or exemplary damages awarded or paid in connection with the Federal cause of action specified in section 107(a)(1) of the Act. The term “punitive or exemplary damages” means damages that are not compensatory but are an award of money made to...”

• 31 C.F.R. 50.12(b) (Description of premium)

  “An insurer may describe the premium charged for insured losses covered by the Program as a portion or percentage of a policy premium, if consistent with standard business practice and provided that the amount of policy premium or the method of determining the policy premium is also stated. An...”

• 31 C.F.R. § 50.4(v)(6) (Definitions, Program Trigger Event)

  “(6) $200,000,000 with respect to calendar year 2020 insured losses and with respect to any calendar year thereafter.”

• 31 C.F.R. § 50.70(a)(1)(vi) (Federal share of compensation)

  “(vi) 80 percent of that portion of the insurer's aggregate insured losses that exceeds its insurer deductible during calendar year 2020 and any calendar year thereafter.”

• 31 C.F.R. § 50.4(p)(1) (Definitions, Insurer deductible)

  “(p) Insurer deductible means: (1) For an insurer that has had a full year of operations during the calendar year immediately preceding the applicable calendar year, the value of an insurer's direct earned premiums during the immediately preceding calendar year, multiplied by 20 percent; and”

• 31 C.F.R. § 50.110 (Cap on annual liability)

  “(a) The Secretary shall not make any payment for any portion of the amount of such losses that exceeds $100,000,000,000; (b) An insurer that has met its insurer deductible shall not be liable for the payment of any portion of the amount of such losses that exceeds $100,000,000,000; and”

• 31 C.F.R. § 50.60(d)-(e) (Finality; Nondelegation)

  “(d) Finality. Any decision by the Secretary to certify, or determination not to certify, an act as an act of terrorism under this subpart shall be final, and shall not be subject to judicial review. (e) Nondelegation. The Secretary may not delegate or designate to any other officer, employee, or...”

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