Request for comments.
Citation: "86 FR 64600"
Page Number: "64600"
SUMMARY: Pursuant to the Terrorism Risk Insurance Act of 2002 (TRIA), the Federal Insurance Office (FIO) requests public feedback on the proposed revisions to the data collection forms for use in the 2022 data call. Copies of these forms and associated instructions (which identify changes to the reporting templates and instructions as previously used by
DATES: Submit comments on or before
ADDRESSES: Submit comments electronically through the Federal eRulemaking Portal: http://www.regulations.gov, or by mail to the Federal Insurance Office, Attn:
FOR FURTHER INFORMATION CONTACT:
I. Background TRIA /1/ created the Terrorism Risk Insurance Program (Program) within the
FOOTNOTE 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. END FOOTNOTE
FOOTNOTE 2 TRIA, Section 104(h)(2) (requiring, inter alia, a report on the effectiveness of the Program); Section 108(h) (requiring a report on the competitiveness of small insurers in the terrorism risk insurance marketplace). END FOOTNOTE
FOOTNOTE 3 TRIA, Section 104(h)(1). The data collection requirements were incorporated within TRIA by Section 111 of the Terrorism Risk Insurance Program Reauthorization Act of 2015 (2015 Reauthorization Act), Public Law 114-1, 129 Stat. 2. END FOOTNOTE
FOOTNOTE 4 31 U.S.C. 313(c)(1)(D). END FOOTNOTE
FOOTNOTE 5 81 FR 11649 (
FOOTNOTE 6 In 2016, a reporting exemption was extended to small insurers writing less than
FOOTNOTE 7 82 FR 20420 (
FOOTNOTE 8 See 83 FR 14718 (
Program regulation 31 CFR 50.51(a) requires insurers to submit the specified data no later than
Insurers subject to the consolidated data call report on a group basis, if part of a group, and otherwise report on an individual company basis.
II. General Reporting Issues and Proposed Changes to Data Collection Templates
Pursuant to TRIA,
There are two general categories of material changes /9/ to the proposed reporting templates for 2022--one that applies solely to captive insurers, and the second that applies to the Cyber worksheet, which is contained in all templates and is to be completed by all participating insurers that write cyber insurance.
FOOTNOTE 9 By material changes,
In the upcoming data call,
FOOTNOTE 10 See Federal Insurance Office, Report on the Effectiveness of the Terrorism Risk Insurance Program (
The second area of material changes relates to the Cyber worksheet, which is completed by all participating insurers that write cyber insurance. In 2016,
FOOTNOTE 11 81 FR 95312 (
FOOTNOTE 12 83 FR 14718, 14720 (
FOOTNOTE 13 86 FR 30537, 30538 (
FOOTNOTE 14 See generally Federal Insurance Office, Annual Report on the Insurance Industry (
Interested parties should review the proposed Cyber worksheet contained within each proposed reporting template, along with the revised Instructions for that worksheet, for further details on the proposed changes.
The following paragraphs summarize the changes to the overall format of the worksheet:
(1) As Treasury recognized in its 2016 Cyber Guidance and in its final rule in 2021, not all cyber insurance is written in TRIP-eligible lines of insurance that would be subject to the Program. In order to assess the amount of cyber insurance that is not subject to the Program, and the potential implications for the Program,
FOOTNOTE 15 As in past data calls,
(2) For cyber insurance written in both TRIP and Non-TRIP eligible lines,
(3) Cyber extortion coverage (which may or may not extend coverage for ransomware payments) also can be an element of cyber insurance coverage. Ransomware has emerged as a significant risk exposure for
FOOTNOTE 16 See, e.g.,
(4) Given the significant increase in ransomware activity and reported substantial claims payments by insurers providing cyber insurance,
For the 2022 data call (requesting insurer data for calendar year 2021), an insurer will qualify as a small insurer if it had both 2020 policyholder surplus and 2020 direct earned premium in the TRIP-eligible lines of insurance of less than
FOOTNOTE 17 Small insurers are defined in 31 CFR 50.4(z) as insurers (or an affiliated group of insurers) with policyholder surplus for the immediately preceding year less than five times the Program Trigger for the current year, and TRIP-eligible lines direct earned premium for the previous year that is also five times less than the Program Trigger. Accordingly, an insurer qualifies as a small insurer if its 2020 policyholder surplus and 2020 direct earned premium are less than five times the 2021 Program Trigger of
FOOTNOTE 18 To the extent an insurer with less than this level of TRIP-eligible lines direct earned premium is part of a larger group that is required to report, the insurer must report as part of the group as a whole, even if it is under the
The non-small insurer template should be completed by insurance groups (or individual insurers not affiliated with a group) that had either a 2020 policyholder surplus or 2020 direct earned premium in the TRIP-eligible lines of insurance equal to or greater than
Captive insurers are defined in 31 CFR 50.4(g) as insurers licensed under the captive insurance laws or regulations of any state. As in prior years, captive insurers that write policies in TRIP-eligible lines of insurance are required to report unless they do not provide their insureds with any terrorism risk insurance that is subject to the Program. As noted above, the captive insurer reporting template contains changes on the Premium and Exposure Bases worksheets, /19/ as well as the global changes relating to cyber insurance described above.
FOOTNOTE 19 In addition, on the Affiliations worksheet for captive insurers, there is now an additional drop-down option for Type of Insurer for affiliated companies, adding Alien Surplus Lines Insurer to the listing, based upon an inquiry received during the 2021 data call. END FOOTNOTE
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 as a small insurer should report 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 group that is subject to reporting on a different template. The reporting template for alien surplus lines insurers does not contain changes, other than the global changes relating to cyber insurance described above.
As in past consolidated data calls, state insurance regulators will provide their own guidance regarding the submission of reporting templates to the New York Portal, as well as in connection with any additional data that may be required for the state data call.
III. Submission of Data
Following registration with the data aggregator, all insurers will be provided with the appropriate reporting templates for completion. Reporting insurers that wish to report in .csv format can obtain information from the data aggregator on how to do so. Insurers will be required to submit the completed reporting templates through a secure web portal provided by the data aggregator. Submission of reports to the New York Portal does not satisfy the obligation to report to
Reporting under the 2022 data call will be mandatory for all commercial property and casualty insurers writing insurance in lines subject to TRIA, unless the insurer falls within the exceptions for certain small insurers and captive insurers described above.
IV. Request for Comments
To ensure efficient and accurate completion of the forms,
(1) Please comment upon the proposed material changes to the existing data collection forms as respects captive insurers and cyber insurance.
(2) Are there other publicly available information sources that bear upon the identified issues concerning captive insurers and insurers writing cyber coverage that
(3) Is there any additional information that
(4) Is there any additional information that
The proposed forms are available for review at https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/federal-insurance-office/terrorism-risk-insurance-program/annual-data-collection.
V. Procedural Requirements
Paperwork Reduction Act. The collection of information contained in this Request for Comments will be submitted to the
Comments are being sought with respect to the collection of information in the proposed Terrorism Risk Insurance Program 2022 data call.
Each set of reporting templates is expected to incur a different level of burden. At the time of the 2020 estimate, the average burden estimate for Non-Small Insurers was 82 hours; for Small Insurers, 28 hours; for Captive Insurers, 51 hours, and for Alien Surplus Lines Insurers, 51 hours. /20/ When Treasury added a Cyber worksheet to the reporting templates in 2018, it did not estimate any additional material burden at that time associated with incremental addition of requiring some limited cyber insurance reporting. /21/
FOOTNOTE 20 85 FR 41676, 41677-78 (
FOOTNOTE 21 82 FR 56328, 56331 (
The changes to the proposed data reporting elements in 2022 are not anticipated to have a significant impact on
Although the amount of information requested concerning cyber insurance is more than has been requested in the past, it is in generally in the same format, with the exception that some information is now requested to be provided by size of policyholder. FIO anticipates that this will require some further manipulation of the data by participating insurers than in prior years. In addition, the templates now request claims-related information. Accordingly, for those insurers required to respond to the Cyber (Nationwide) worksheet,
Assuming this breakdown, and when applied to the number of reporting insurers anticipated in light of the experience of the 2021 data call, the estimated annual burden would be 51,800 hours ((100 insurers x 90 hours) + (225 insurers x 32 hours) + (575 insurers x 52 hours) + (100 insurers x 57 hours)). At a blended, fully loaded hourly rate of
FOOTNOTE 22 Based on data from the
Director, Federal Insurance Office.
[FR Doc. 2021-25181 Filed 11-17-21;
BILLING CODE 4810-AK-P