Terrorism Risk Insurance Program-Data Collection Forms (Extension of Currently Approved Data Collection Under OMB No. 1505-0257)

AGENCY:

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

ACTION:

Notice and Request for Comments.

SUMMARY:

The Secretary of the Treasury (Secretary) administers the Terrorism Risk Insurance Program (TRIP or Program), including the issuance of regulations and procedures regarding the Program. The Federal Insurance Office (FIO) assists the Secretary in the administration of the Program. The Department of the Treasury (Treasury), as part of its continuing effort to reduce paperwork burdens, invites the general public and other Federal agencies to comment on approved information collections for annual data collection that are due for extension by the Office of Management and Budget (OMB) (under OMB 1505-0257). These forms will be used, beginning in calendar year 2021, in connection with both the federal and state annual data calls regarding terrorism risk insurance. State insurance regulators, through the National Association of Insurance Commissioners (NAIC), will separately seek comment from stakeholders on the state data call.

DATES:

Submit comments on or before September 8, 2020.

ADDRESSES:

Submit comments electronically through the Federal eRulemaking Portal: http://www.regulations.gov,, or by mail to the Federal Insurance Office, Attn: Richard Ifft, Room 1410 MT, Department of the Treasury, 1500 Pennsylvania Avenue NW, Washington, DC 20220. Because postal mail may be subject to processing delays, it is recommended that comments be submitted electronically. If submitting comments by mail, please submit an original version with two copies. Comments concerning the proposed data collection forms and collection process should be captioned with “TRIP Data Call Form Comments.” Please include your name, group affiliation, address, email address, and telephone number(s) in your comment. Where appropriate, a comment should include a short Executive Summary (no more than five single-spaced pages).

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 (202) 622-2922 (not a toll-free number), or Lindsey Baldwin, Senior Insurance Regulatory Policy Analyst, Federal Insurance Office, at (202) 622-3220 (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 (800) 877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

The Terrorism Risk Insurance Act of 2002, as amended (TRIA), established the Terrorism Risk Insurance Program (TRIP or Program). Reauthorized through 2027, the Act establishes a temporary federal program of shared public and private compensation for insured commercial property and casualty losses resulting from an “act of terrorism,” as defined by TRIA. The Act requires the Secretary to perform periodic analyses of certain matters concerning the Program. In order to assist the Secretary with this process, TRIA requires insurers to submit on an annual basis certain insurance data and information regarding their participation in the Program.

Treasury began collecting data from insurers in 2016 on a voluntary basis, and on a mandatory basis beginning in 2017. In 2018, Treasury and state insurance regulators (which also collect information on terrorism risk insurance in separate data calls) agreed on joint reporting templates substantially similar to those used by Treasury in prior years. The forms that are currently approved for use, and which were utilized during the 2020 TRIP data call, expire effective September 30, 2020. Treasury seeks to continue to use the same forms for the next three-year period, without changes except for non-material modifications each year relating to the dates for which data is sought and the incorporation of relevant Program thresholds, and changes to the modeled loss question that is posed each year to estimate the potential impact upon the Program from hypothetical terrorism loss events.

Pursuant to TRIA, Treasury has evaluated whether publicly available sources can supply the information needed in the annual data call. Information relating to workers' compensation exposures is available from the workers' compensation rating bureaus, and Treasury will continue to coordinate with those entities to provide that information on behalf of participating insurers. Treasury has determined, however, that all other data components remain unavailable from other sources. Accordingly, Treasury will continue to request this remaining data and information directly from insurers. By continuing to collect information on a consolidated basis with state regulators, however, a significant reduction in overall data collection burdens for participating insurers is achieved.

II. Data Collection Process

Treasury expects the data collection process to remain the same while the proposed forms are in effect. Treasury again proposes to use four different data collection forms (see 31 CFR 50.51(c)), depending on the type of insurer involved. Insurers will fill out the form identified “Insurer (Non-Small) Groups or Companies,” unless the insurer meets the definition of a small insurer, captive insurer, or alien surplus lines insurer as set forth in 31 CFR 50.4. Such small insurers, captive insurers, and alien surplus lines insurers are required to complete separate tailored forms. Separate instructions providing guidance on each requested data element accompany each form. There are reporting thresholds that affect which form a particular insurer needs to complete, or whether the insurer is subject to reporting at all. Reporting insurers submit information to Treasury through a portal managed by a data aggregator retained by Treasury, as required by TRIA; state regulators require insurers to submit the same information for state purposes through a portal operated by New York State.

Treasury will issue a Federal Register Notice each year identifying when the data collection portal is open to receive submissions, identifying any non-material changes to the reporting forms and instructions, and providing further technical details respecting the reporting. To the extent Treasury determines to make any material changes to the existing data collection forms, it will provide public notice and opportunity to comment, incidental to an application for approval to OMB.

III. Request for Comments

Copies of the existing forms and associated explanatory materials are available for electronic review on the Treasury website at https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/federal-insurance-office/terrorism-risk-insurance-program/annual-data-collection. Treasury is requesting public feedback on the content of these reporting forms. In particular, Treasury requests feedback on the Places of Worship worksheet, which is contained within each of the reporting forms. This worksheet was a new reporting requirement first instituted in 2020, in response to changes contained within the Terrorism Risk Insurance Program Reauthorization Act of 2019. As a result, Treasury has not previously submitted this worksheet for public notice and comment. Treasury seeks any suggestions for how this Places of Worship worksheet might be improved, particularly based upon the experience of reporting insurers using it during the 2020 TRIP data call.

IV. Procedural Requirements

Paperwork Reduction Act. The collection of information contained in this notice will be submitted to the Office of Management and Budget (OMB) for review under the requirements of the Paperwork Reduction Act, 44 U.S.C. 3507(d). Comments should be sent to Treasury in the form discussed in the ADDRESSES section of this notice. Comments on the collection of information should be received by September 8, 2020.

Comments are being sought with respect to the collection of information in the proposed annual TRIP data call. Treasury specifically invites comments on: (a) Whether the proposed collection is responsive to the statutory requirement; (b) the accuracy of the estimate of the burden of the collections of information (see below); (c) ways to enhance the quality, utility, and clarity of the information collection; (d) ways to use automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to maintain the information.

The information sought by Treasury comprises data elements that insurers currently collect or generate, although not necessarily grouped together the way in which insurers currently collect and evaluate the data. Based upon insurer submissions to the 2020 TRIP data call, Treasury estimates that for purposes of future annual TRIP data calls, approximately 100 Program participants will be required to submit the “Insurer (Non-Small) Groups or Companies” data collection form, 200 Program participants will be required to submit the “Small Insurer” form, 550 Program participants will be required to submit the “Captive Insurer” form, and 50 Program participants will be required to submit the “Alien Surplus Lines Insurers” form.

Treasury has previously analyzed the potential burdens associated with completing the annual TRIP data call forms. See 81 FR 95310, 95312 (December 27, 2016). That prior estimate, however, did not include the additional burden of completing the new Places of Worship worksheet, which Treasury estimates at approximately 10 additional hours for those insurers required to complete it. Treasury does not anticipate, however, that every reporting insurer will be required to complete the Places of Worship worksheet, since some may not provide insurance to Places of Worship.

Treasury expects each set of reporting templates to incur a different level of burden. Treasury now anticipates, once an additional weighted average charge is included to account for those insurers that will now need to complete the Places of Worship worksheet, that approximately 82 hours will be required on average to collect, process, and report the data for each non-small insurer; approximately 28 hours will be required to collect, process, and report data for each small insurer; approximately 51 hours will be required to collect, process, and report data for each captive insurer; and approximately 51 hours will be required to collect, process, and report data for each alien surplus lines insurer.

Assuming this breakdown, and when applied to the number of reporting insurers anticipated in light of prior experience, the estimated annual burden would be 44,400 hours ((100 non-small insurers × 82 hours) + (200 small insurers × 28 hours) + (550 captive insurers × 51 hours) + (50 alien surplus lines insurers × 51 hours)). At a blended, fully loaded hourly rate of $50.50, the cost would be $2,242,200 across the industry as a whole, or $4,141 per each non-small insurer ($50.50 × 82 hours), $1,414 per each small insurer ($50.50 × 28 hours), $2,576 per each captive insurer ($50.50 × 51 hours), and $2,576 per each alien surplus lines insurer ($50.50 × 51 hours).