2019-06618. 2019 Data Call Under the Terrorism Risk Insurance Program

AGENCY:

Departmental Offices, U.S. Department of the Treasury.

ACTION:

Data Collection.

SUMMARY:

Pursuant to the Terrorism Risk Insurance Act of 2002 (TRIA), insurers that participate in the Terrorism Risk Insurance Program (TRIP or Program) are directed to submit information for the 2019 TRIP Data Call for the reporting period from January 1, 2018 to December 31, 2018. Participating insurers are required to register and report information in a series of forms approved by the Office of Management and Budget (OMB). All insurers writing commercial property and casualty insurance in lines subject to TRIP must respond to this data call no later than May 15, 2019, subject to certain exceptions identified in this notice.

DATES:

Participating insurers must register and submit data no later than May 15, 2019.

ADDRESSES:

Participating insurers will register through a website that has been established for this data call. After registration, insurers will receive data collection forms through a secure file transfer portal, and they will submit the requested data through the same secure portal. Participating insurers can register for the 2019 TRIP Data Call at https://tripsection111data.com/​. Additional information about the data call, including sample data collection forms and instructions, can be found on the TRIP website at https://www.treasury.gov/​resource-center/​fin-mkts/​Pages/​TRIP_​data.aspx.

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 [phone] (this is not a toll-free number), or Lindsey Baldwin, Senior Policy Analyst, Federal Insurance Office, Room 1410 MT, Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220, at [phone] (this is 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 [phone].

SUPPLEMENTARY INFORMATION:

I. Background

TRIA ^[1] created the Program within the U.S. Department of the Treasury (Treasury) 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 market 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 (2015 Reauthorization Act).^[2] Section 111 of the 2015 Reauthorization Act ^[3] (Section 111) requires the Secretary of the Treasury (Secretary) to perform periodic analyses of the Program. In order to assist the Secretary with this process, Section 111 requires insurers to submit on an annual basis certain insurance data and information regarding their participation in the Program.^[4] The Federal Insurance Office (FIO) is authorized to assist the Secretary in the administration of the Program,^[5] including conducting the annual data call.

On November 9, 2018, Treasury published the data collection forms that it proposed to use in the 2019 TRIP Data Call, and invited the public to provide comments concerning these forms.^[6] Treasury received two comments.^[7] In response, and as discussed further below, Treasury has made a number of modifications to the forms and instructions. OMB has approved the use of these forms under Control Number 1505-0257.

II. Changes to 2019 Data Call

For purposes of the 2019 TRIP Data Call, FIO, state insurance regulators, and the National Association of Insurance Commissioners (NAIC) will again utilize the consolidated data call mechanism first developed for use in the 2018 TRIP Data Call. This approach relies upon four (4) joint reporting templates—to be completed by Small Insurers, Non-Small Insurers, Alien Surplus Lines Insurers, and Captive Insurers, as identified further below—and is designed to satisfy the regulatory objectives of both Treasury and state insurance regulators. Additionally, the joint reporting templates reduce burden on participating insurers. State insurance regulators and/or the NAIC will provide separate notification regarding the reporting of information into the state reporting portal, including any supplemental information reporting requirements to state insurance regulators separate from what is required by Treasury.

A. Reporting Process

Insurers subject to the consolidated data call will report on a group basis, unless they are not part of a group, in which case they will report on an individual company basis. For the 2019 Data Call, Treasury will again work with the National Council on Compensation Insurance (NCCI), the California Workers' Compensation Insurance Rating Bureau (California WCIRB), and the New York Compensation Insurance Rating Board (NYCIRB) to provide (either directly or through other workers' compensation rating bureaus), on behalf of participating insurers, the workers' compensation insurance elements of the data call relating to premium and payroll information. The data aggregator used by Treasury will provide such insurers with reporting templates that do not require them to report this workers' compensation data. Reporting insurers that only write workers' compensation policies are still required to register for the data call, provide general company information, and provide data related to private reinsurance. The data received from NCCI, the California WCIRB, and/or the NYCIRB will be merged with the information provided by the insurers.

B. Reporting Templates

There are two principal changes to the reporting templates from the 2018 TRIP Data Call. First, the exposures worksheet, which is included within all four reporting templates, has been modified to include questions seeking information on policy limits for nuclear, biological, chemical, and radiological (NBCR) exposures, as a subset of the total reported policy limits covering terrorism risk. Second, a new modeled loss question (which includes an NBCR component) is included on the reinsurance worksheet that will be completed by non-small insurers, alien surplus lines insurers, and captive insurers.^[8]

The comments received posed a number of questions concerning the manner of reporting contemplated under the proposed reporting templates, including the connection between the federal and state data calls. Although the comments concerning the manner of reporting did not indicate any changes to the forms or instructions that should be made, Treasury will provide further instructions concerning the completion of the forms through webinars that it will conduct, particularly in connection with the new data elements for NBCR insurance limits. In addition, Treasury has made minor changes to the forms as originally proposed to correct typographical errors and to make language consistent across forms.

Furthermore, one comment suggested a number of changes to the modeled loss question. In response to this comment, Treasury made a number of changes to the modeled loss question, designed to make it easier for reporting insurers to respond to the hypothetical scenario presented.

There are also a number of template changes required by the Program regulations that are specific to individual insurer categories. For the 2019 TRIP Data Call, an insurer will qualify as a small insurer if it had both 2017 policyholder surplus of less than $800 million and 2017 direct earned premiums in TRIP-eligible lines of insurance of less than $800 million.^[9] Of this group, small insurers with TRIP-eligible direct earned premiums of less than $10 million in 2018 will be exempt from the 2019 TRIP Data Call.^[10] Neither captive insurers nor alien surplus lines insurers are eligible for this reporting exemption. Insurers defined as small insurers for the 2019 Data Call will report the same information to Treasury (on a group basis) and state insurance regulators (also on a group basis), except as state insurance regulators may separately direct for purposes of the state data call.

The non-small insurer template will be completed by insurance groups (or individual insurers not affiliated with a group) that had either a 2017 policyholder surplus of greater than $800 million or 2017 direct earned premium in TRIP-eligible lines of insurance equal to or greater than $800 million, and that are not subject to reporting on the captive insurer or alien surplus lines insurer reporting templates. Otherwise, insurers defined as non-small insurers for the 2019 Data Call will report the same information to Treasury (on a group basis) and state insurance regulators (also on a group basis), except as state insurance regulators may separately direct for purposes of the state data call.

The reporting template for captive insurers does not contain additional changes specific to those insurers. Captive insurers are defined in 31 CFR 50.4(g) as insurers licensed under the captive insurance laws or regulations of any state. Captive insurers that wrote policies in TRIP-eligible lines of insurance during the reporting period are required to register and submit data to Treasury, unless they did not provide their insureds with any terrorism risk insurance subject to the Program.

The reporting template for alien surplus lines insurers does not contain additional changes specific to those insurers. 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. Alien surplus lines insurers that are part of a larger group classified as a non-small insurer or a small insurer should report to Treasury as part of the group, using the appropriate template. Therefore, the alien surplus lines insurer template should only be used by an alien surplus lines insurer that is not part of a larger group subject to the 2019 Data Call.

C. Supplemental Reference Documents

Treasury will continue to make available on its data collection website (https://www.treasury.gov/​resource-center/​fin-mkts/​Pages/​TRIP_​data.aspx) documents providing a complete ZIP code listing for areas subject to reporting on the Geographic Exposures (Nationwide) worksheet, as well as several hypothetical policy reporting scenarios.

D. Training Webinars

As in prior years, Treasury will hold four (4) separate training sessions corresponding to the four reporting templates that will be used by insurers (Alien Surplus Lines Insurers, Captive Insurers, Insurer (Non-Small) Groups or Companies, and Small Insurers). The webinars will be held on April 9 and April 10, 2019 to assist reporting insurers in responding to the proposed collection, with each webinar focusing on a specific reporting template. Specific times and details concerning participation in the webinar will be made available on the TRIP data collection website, and recordings of each webinar will be made available on the website following each training session.

III. 2019 TRIP Data Call

For the 2019 TRIP Data Call, which covers the reporting period of January 1, 2018 to December 31, 2018, Treasury will continue to use four different data collection templates.^[11] Insurers will fill out the template for “Insurer (Non-Small) Groups or Companies,” unless the insurer meets the definition of a small insurer, captive insurer, or alien surplus insurer, as set forth in 31 CFR 50.4. Such small insurers, captive insurers, and alien surplus lines insurers are required to complete an alternate template.

Treasury, through an insurance statistical aggregator, will accept group or insurer registration forms through https://tripsection111data.com/​. Upon registration, the aggregator will transmit individualized data collection forms (in Excel format) to the reporting group or insurer via a secure file transfer portal. The reporting group or insurer may transmit a complete data submission via the same portal using either the provided Excel forms or a .csv file.^[12]

Copies of the instructions and data collection forms are available on Treasury's website in read-only format. Reporting insurers will obtain the fillable reporting forms directly from the data aggregator after registering for the data collection process.

Reporting insurers are required to register and submit complete data to Treasury no later than May 15, 2019. Because of the timing and content of Treasury's 2019 report to Congress, no extensions will be granted. Reporting insurers can ask the data aggregator questions about registration, form completion, and submission through [e-mail]. Treasury, as identified above, may also be contacted directly with questions. Questions regarding submission of data to state insurance regulators or the property supplement should be directed to the appropriate state insurance regulator or the NAIC.

All data submitted to the aggregator is subject to the confidentiality and data protection provisions of TRIA and the Program Rules, as well as to section 552 of title 5, United States Code, including any exceptions thereunder. In accordance with the Paperwork Reduction Act, (44 U.S.C. 3501 et seq.), the information collected through the web portal has been approved by OMB under Control Number 1505-0257. An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a valid OMB control number.

Dated: March 29, 2019.

Steven E. Seitz,

Director, Federal Insurance Office.

Footnotes

1.  Public Law 107-297, 116 Stat. 2322, codified at 15 U.S.C. 6701, note. Because 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.  Public Law 114-1, 129 Stat. 3.

3.  TRIA sec. 104(h).

4.  Treasury regulations also address the annual data collection requirement. See 31 CFR 50.51, 50.54.

5.  31 U.S.C. 313(c)(1)(D).

6.  83 FR 56152 (Nov. 9, 2018).

7.  Treasury received comments from the Sentry Insurance Group and AIR Worldwide. The comments are available at https://www.regulations.gov/​docket?​D=​TREAS-TRIP-2018-0026.

8.  See generally 83 FR 56152, 56152-53 (Nov. 9, 2018). Small insurers complete a separate reinsurance worksheet that does not contain a modeled loss question.

9.  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 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. Accordingly, for the 2019 Data Call, an insurer qualifies as a small insurer if its 2017 policyholder surplus and 2017 direct earned premium are less than five times the 2018 Program Trigger of $160 million.

10.  Individual insurers with less than $10 million in TRIP-eligible lines direct earned premium that are part of a larger group must still report as part of the group as a whole, if the group's TRIP-eligible lines direct earned premium is over $10 million.

11.  See 31 CFR 50.51(c).

12.  Specifications for submission of data using a .csv file will be provided to the insurer by the aggregator.