When the government declares an event “an act of terrorism” is just as important as how it reaches that conclusion, according to new documents focused on implementation of recently passed terrorism insurance legislation.
The U.S. Treasury Department released a public comment notice last week as part the requirements of the Terrorism Risk Insurance Program Reauthorization Act TRIA of 2015 (TRIA). The comment process, which is being overseen by Treasury’s Federal Insurance Office (FIO), will be incorporated into a report and ultimately used as part of final rules for for a revamped terrorism act “certification process.”
According to the request, the timing how the government determines an act of terrorism is a key portion of the consideration. Among other aspects of making in terrorism insurance certification process, the government is seeking comment on:
- The establishment of a “reasonable timeline” in making and “accurate” call on whether to certify an act as an act of terrorism;
- the impact that the “length of any timeline” on the insurance industry, policyholders, consumers, and taxpayers; and
- the “extent” to which the terrorism timeline call may be influenced “by domestic or international law enforcement processes.”
In addition to when government declares an act of terrorism, the FIO will also attempt to determine the the best way to collect the projected amount of insured losses from an event.
“[The FIO is also seeking] the implications for insurers or policyholders if one or more events are certified as acts of terrorism but the aggregate, calendar-year insured losses do not exceed the amount required for Treasury to make payments for insured losses.”
Comments are due back to the FIO on March 6.
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