Summary: S.2600 — 107th Congress (2001-2002)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed Senate amended (06/18/2002)

Terrorism Risk Insurance Act of 2002 - Establishes in the Department of the Treasury the Terrorism Insured Loss Shared Compensation Program, administered by the Secretary of the Treasury, who shall have general Program authorities and pay the Federal share of compensation for insured losses.

(Sec. 4) Prescribes guidelines for: (1) mandatory insurance company participation in the Program; and (2) mandatory availability of property and casualty insurance for insured losses that does not differ materially from coverage limitations applicable to losses arising from events other than terrorism.

Predicates Program participation by certain governmental or quasi-governmental entities upon a determination made by the Secretary before the occurrence of an act of terrorism in which the entity incurs an insured loss.

Sets forth a formula for shared insurance loss coverage that includes: (1) a Federal share of compensation that is either 80 percent of aggregate insured losses of less than $10 billion, or 90 percent of aggregate insured losses that exceed $10 billion; and (2) a cap on the annual liability of the Federal share of compensation.

Denies judicial review of the Secretary's determination.

(Sec. 6) Terminates the Program one year after the date of enactment. Prescribes conditions for Program extension.

Expresses the sense of Congress that the Secretary should make any determination regarding either Program extension or termination in sufficient time to enable participating insurance companies to include coverage for acts of terrorism in their policies for the second year of the Program, if extended.

Mandates studies and reports to Congress on: (1) insurance coverage availability coupled with insurance industry capacity to absorb future losses resulting from acts of terrorism taking into account profitability; (2) the potential effects of acts of terrorism on the availability of life insurance and other insurance coverage; and (3) terrorism risk insurance premium rates charged by participating insurance companies for insured losses.

(Sec. 8) Expresses the sense of the Congress that the insurance industry should build capacity and aggregate risk to provide affordable property and casualty insurance coverage for terrorism risk.

(Sec. 9) Authorizes appropriations.

(Sec. 10) Establishes a Federal cause of action for property damage, personal injury, or death arising out of or resulting from an act of terrorism which shall preempt State action, and which shall be the exclusive cause of action and remedy for claims (except for claims against terrorists or aiders and abettors, including governments and other entities).

(Sec. 11) Provides for satisfaction of judgments from frozen assets of terrorists, terrorist organizations, and state sponsors of terrorism. Exempts certain property subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations.

Amends the Victims of Trafficking and Violence Protection Act of 2000 to set forth a special rule for cases against Iran with respect to distribution of foreign military sales funds inadequate to satisfy the amount of compensatory awards against Iran.