FR 2025-06704

General Summary of the Document

The document, issued by the U.S. Department of the Treasury, announces the 2025 Terrorism Risk Insurance Program (TRIP) Data Call. This initiative requires insurance companies participating in TRIP to submit detailed information about their coverage from January 1, 2024, to December 31, 2024. This mandatory data submission, which is due by May 15, 2025, is crucial for a biennial report assessing the competitiveness of small insurers in the terrorism risk insurance marketplace. The data will also support statutory reporting requirements to Congress.

Significant Issues or Concerns

A few notable issues emerge from the document. Importantly, while the document outlines the data collection process, it lacks a clear explanation of how this data will be used beyond fulfilling statutory requirements. Contextual insights into the direct impacts on policyholders or the insurance market could enhance reader understanding.

Moreover, the document refers to hypothetical policy reporting scenarios but does not provide comprehensive guidance on where these resources can be found or their intended use. This omission may create uncertainty for insurers as they prepare their submissions.

There are also exceptions to the data call—for example, Small Insurers with less than $10 million in premiums are exempt. However, more explicit guidance on how these exceptions serve the participants or the overall impact of these exceptions would be beneficial. Terminology such as "Alien Surplus Lines Insurers" and "TRIP-eligible lines of insurance" might be confusing for readers unfamiliar with industry jargon. Simplifying these terms or providing additional context could facilitate reader understanding.

Additionally, while confidentiality and data protection are emphasized, specific measures or protocols to safeguard this data are not detailed, potentially leaving stakeholders uncertain about the security of their information.

Impact on the Public Broadly

Broadly, the document underlines the federal commitment to ensuring the availability and affordability of terrorism risk insurance. By collecting this data, the government aims to stabilize the market, which may indirectly benefit the general public by ensuring businesses and properties remain insured against terrorism-related risks. However, for the public to fully appreciate these efforts, it would be helpful to provide clearer communication on the outcomes derived from previous data calls.

Impact on Specific Stakeholders

For insurance companies, particularly those participating in the TRIP, the data call represents a regulatory obligation. Large and small insurers alike must navigate the strict deadlines and reporting requirements. On one hand, this may be burdensome due to the detailed data submission demands and potential complexity of forms. On the other hand, participating insurers could benefit from a stable and predictable market, which supports their ongoing business operations.

Small Insurers may face a diversion of resources to comply with reporting requirements, though many with less than $10 million in premiums are exempt. Meanwhile, organizations like the National Council on Compensation Insurance (NCCI) and state-specific boards like California WCIRB and NYCIRB play critical roles in facilitating data collection, suggesting a collaborative approach to gathering comprehensive industry data.

Overall, while the document outlines important procedural details for the insurance industry, a more thorough explanation of the process's broader impacts and benefits could further elucidate the purpose and value of the TRIP Data Call.

The financial references within the document predominantly center around the qualifications and reporting thresholds for insurers participating in the 2025 Terrorism Risk Insurance Program (TRIP) Data Call. The document provides explicit monetary definitions of what constitutes a Small Insurer versus a Non-Small Insurer, grounded in precise financial metrics such as policyholder surplus and direct earned premiums.

Definitions and Thresholds

The document outlines that for the 2025 TRIP Data Call, a Small Insurer is defined as one with a 2023 policyholder surplus of less than $1 billion and 2023 direct earned premiums in TRIP-eligible lines of insurance of less than $1 billion. Furthermore, insurers falling under this umbrella with TRIP-eligible direct earned premiums of less than $10 million in 2024 will be exempt from reporting in the 2025 Data Call. This exemption provides relief from administrative reporting for very small insurers, but offers little context regarding how it effectively benefits the insurers or affects policyholders.

Conversely, Non-Small Insurers include those not captured by the small insurer definition, specifically those with either a 2023 policyholder surplus greater than $1 billion or 2023 direct earned premiums equal to or greater than $1 billion. This delineation ensures that larger insurers, which likely have a more significant impact on the market, are comprehensively included in the data collection.

Program Trigger

A critical component in defining a Small Insurer is its relation to the Program Trigger, set at $200 million for 2024. An insurer is classified as small if both its 2023 policyholder surplus and direct earned premiums are less than five times this trigger, reinforcing the framework used to determine which insurers are burdened or exempted from reporting duties based on scale.

Group Reporting Implications

The document further specifies that individual insurers with less than $10 million in direct earned premiums but part of a larger group should still report as part of the group if the group surpasses this threshold. This requirement suggests an aggregated responsibility of financial performance when assessing eligibility and counteracts loopholes that might allow larger entities to qualify for exemptions by breaking into smaller sub-units.

Relevance to Identified Issues

The financial references play a crucial role in clarifying which entities must participate in the data collection and offering exclusions for smaller entities, addressing the identified issue of participation exceptions. However, the implications or benefits of these exceptions remain inadequately addressed, leaving an information gap regarding their intention or possible effects on market competition or policyholder protection.

In summary, the financial qualifications detailed in the TRIP data call delineate structured thresholds intended to balance reporting burden with the import of data collected from various sizes of insurers. Yet, the context and broader implications of these financial thresholds, beyond mere qualification for reporting requirements, remain obscure and warrant further elucidation for stakeholders to fully grasp their impact within the insurance market.