CBI’s Comments on Treasury’s Request for Comment on Terrorism Risk Captives
Last month U.S. Treasury published a Notice of Proposed Rulemaking and Request for Comments with respect to the Terrorism Risk Insurance Program.
Treasury seeks comments on ways to address the outsized role captive insurers play in the Program and whether the Program should permit public identification of individual captive insurers.
CBI has filed comments urging Treasury to adopt the same level of public transparency to insurers participating in the Terrorism Risk Insurance Program as it has applied to small business borrowers participating in the Paycheck Protection Program. Specifically, CBI urges Treasury to publicly disclose:
- The name and address of each participating insurer or insurer group;
- The nature of the participating insurer (i.e., small insurer, non-small insurer, alien insurer or captive insurer); and
- The participating insurer’s “insurer deductible” as an indication of the amount of risk the participating insurer has shifted into the Program.
CBI further recommends that, for captives, the publicly available information should also include:
- The captive’s ultimate beneficial owner;
- The limits of terrorism insurance provided other than for NBCR; and
- The limits of terrorism insurance provided for NBCR (if any).
To illustrate the unjustifiably disparate treatment of participants in the respective programs, CBI contrasts the transparency Congress, Treasury and the American taxpayer enjoy with respect to:
- An $8 PPP loan recently granted to a California medical transport company; and
- The $1.2 billion nuclear, biological, chemical, and radiological terrorism reinsurance commitment TRIP has been making to a Swiss banking giant for more than a decade.
For one of these participants, Treasury gives us a name, address, amount of program benefit received and even the gender, ethnicity, and veteran status of its owner. For the other, Treasury has told us nothing — because Treasury itself has no record of the transaction.
There is more governmental oversight and public transparency applied to an $8 federal loan than to a $1.2 billion federal reinsurance commitment. The only difference seems to be that one program is for small businesses while the other has been overrun by multinational corporations.
This is not right. Treasury’s request for comment offers some hope it is prepared to do something about it.
