Form TRIP 04A TRIP 04A TRIP Monthly Calculation of Federal Terrorism Policy Sur

Control Number_____________________

(Treasury use)

DRAFT 9/2008

TERRORISM RISK INSURANCE PROGRAM

STATEMENT OF “DIRECT WRITTEN PREMIUM”

AND

MONTHLY CALCULATION OF “FEDERAL TERRORISM POLICY SURCHARGE” DUE UNDER

TERRORISM RISK INSURANCE ACT (TRIA)

Insurer Name: ___________________________________________________________

NAIC Insurer Number (or TIN if no NAIC #): __________

Calendar Year of Direct Written Premium (see instructions for guidance): ___________ Reporting Month: ________________

Submitted for Period Beginning: _______________________ Ending: ____________________

Is this submission an original or a correction? (enter an ‘O’ or ‘C’): _____

Step 1:

Enter the direct Written Premiums for the applicable month for commercial lines of business (see instructions for guidance) as would typically be reported in column 1 of the Exhibit of Premiums and Losses of the NAIC Annual Statement (Statutory Page 14) or from another appropriate reporting mechanism. Column 1A is always cumulative for the applicable calendar year during an assessment period, and Column 1B is the direct Written Premium for the same calendar year prior to the start of the assessment period. Columns 1B and 1C must sum to Column 1A. Columns 2 – 5 should sum to column 1C. However, if necessary, additional columns (and sheets) may be added to complete the breakout of premiums by Policy Year and to account fully for the entry in column 1C. See instructions for guidance. Note, all entries are in whole dollars.

	Direct Written Premium
	-Column 1A- Cumulative Premium Year to Date	-Column 1B- Premium Prior to Assessment Period	- Column 1C - Cumulative Premium During Assessment Period	- Column 2 - Policy Year 20xx	- Column 3 - Prior Policy Year (20xx -1 year)	- Column 4 - Prior Policy Year (20xx -2 years)	- Column 5 - Prior Policy Year (20xx -3 years)
	$______________	$______________	$______________	$______________	$______________	$______________	$______________

Step 2:

Enter premiums, if any, included in the direct written premium reported under STEP 1 that are for insurance coverage not subject to the Federal Terrorism Policy Surcharges (see instructions for guidance).

	Direct Written Premium
	- Column 1C - Cumulative Premium During Assessment Period	- Column 2 - Policy Year 20xx	- Column 3 - Prior Policy Year (20xx -1 year)	- Column 4 - Prior Policy Year (20xx -2 years)	- Column 5 - Prior Policy Year (20xx -3 years)
	$________________	$________________	$________________	$________________	$________________

Step 3:

Complete the following formulas to determine the insurer’s cumulative direct written premium, for the applicable period, subject to the Federal Terrorism Policy Surcharge.

	Direct Written Premium
	- Column 1C – Cumulative Premium During Assessment Period	- Column 2 - Policy Year 20xx	- Column 3 - Prior Policy Year (20xx -1 year)	- Column 4 - Prior Policy Year (20xx -2 years)	- Column 5 - Prior Policy Year (20xx -3 years)
STEP 1 Numbers (as applicable)	$________________	$________________	$________________	$________________	$________________
SUBTRACT STEP 2 Numbers (as applicable)	$__________________	$__________________	$________________	$__________________	$__________________
EQUALS Premium Subject to Surcharge	$__________________	$__________________	$________________	$__________________	$__________________

Step 4:

Complete the following formulas to determine the insurer’s Federal Terrorism Policy Surcharge for the applicable period.

	Direct Written Premium Subject to Surcharge
	- Column 1C -	- Column 2 - Policy Year 20xx	- Column 3 - Prior Policy Year (20xx -1 year)	- Column 4 - Prior Policy Year (20xx -2 years)		- Column 5 - Prior Policy Year (20xx -3 years)
Premium Subject to Surcharge (Step 3)	$______________	$________________	$________________	$________________		$______________
MULTIPLY by Surcharge Percentage Established by Treasury for Individual Policy Years	Not Applicable	______%	______%	______%		______%
EQUALS Surcharge by Policy Year	Not Applicable	$________________	$________________	$________________		$______________
TOTAL DUE (Add Surcharge By Policy Year, columns 2-5) $_______________________

Certification

I hereby certify that the direct written premium data, calculations, and supporting documentation used to determine the insurer’s Federal Terrorism Policy Surcharge are accurate and complete to the best of my information, knowledge and belief. Any false or fraudulent statements may subject the insurer or signatory to criminal, civil, or administrative penalties.

______________________________ Name

_____________________________ Officer Title

____________________ Date

_____________________________

Signature

Notice Under the Paperwork Reduction Act

We estimate it will take you about 5 hours to complete this form. However, you are not required to provide information requested unless a valid OMB control number is displayed on the form. Any comments or suggestions regarding this form should be sent to the Terrorism Risk Insurance Program Office, 1425 New York Avenue, NW, Washington, DC 20220. Do not send completed form to this address. Submit forms according to instructions provided at www.treas.gov/trip.

Direct Written Premium and Federal Terrorism Policy Surcharge Instructions

1General Instructions

1.1Filing of Form

This form is required in order to determine and document each individual insurer’s amount to be submitted for Federal Terrorism Policy Surcharges under the Terrorism Risk Insurance Act (“TRIA”). Affiliated insurers are not to be grouped together for this purpose. The form must be completed, certified by an officer of the insurer, and submitted to Treasury.

Insurers should maintain all worksheets and other documentation for the purposes of later auditing by the Terrorism Risk Insurance Program (“Program”). See 31 C.F.R. Part 50 Subpart G for guidance.

1.2Assessment Period and Reporting Schedule

The assessment period means a period established by Treasury, during which policyholders of property and casualty insurance polices must pay, and insurers must collect, the Federal Terrorism Policy Surcharge for remittance to Treasury.

For policies subject to the Federal Terrorism Policy Surcharge, the surcharge shall be imposed and collected on a written premium basis for policies in force during the assessment period . All new, renewal, mid-term, and audit additional premiums for a policy term are subject to the Surcharge in effect on the policy term effective date. (Note: A policy effective prior to a current assessment period may have no surcharge in effect on the policy term effective date.)

Each insurer shall submit a completed Statement of “Direct Written Premium” and Calculation of “Federal Terrorism Policy Surcharge” on a monthly basis starting with the first month within the assessment period through November of the calendar year and on an annual basis as of the last month of the calendar year. Reports are due according to the following schedule:

1. For each month beginning in first month of the assessment period through November, the last business day of the calendar month following the month for which premium is reported, and

2. March 1 for the calendar year.

1.3Lines of Business Subject to Terrorism Policy Surcharge

1.3.1 Commercial property and casualty lines of business subject to the Federal Terrorism Policy Surcharge means only the following lines of business from the NAIC Exhibit of Premiums and Losses (commonly known as Statutory Page 14): Line 1 -- Fire; Line 2.1 -- Allied Lines; Line 5.1 -- Commercial Multiple Peril (non-liability portion); Line 5.2 -- Commercial Multiple Peril (liability portion); Line 8 -- Ocean Marine; Line 9 -- Inland Marine; Line 16 -- Workers' Compensation; Line 17 -- Other Liability; Line 22 -- Aircraft (all perils); and Line 27 -- Boiler and Machinery. Insurers that do not report to the NAIC should review General Instructions 1.5. Insurance coverage that is written on a dwelling policy form, but for which premiums are reported under the above lines of business (e.g., 1-4 family rental dwelling), is still included in the Program.

1.3.2 Other lines of business from Statutory Page 14 are not subject to the Federal Terrorism Policy Surcharge. Insurance coverages specifically not subject to the Surcharge are: Federal crop insurance issued or reinsured under the Federal Crop Insurance Act; any other type of crop or livestock insurance that is privately issued or reinsured (including crop insurance reported on either Line 2.1 – Allied Lines or Line 2.2. – Multiple Peril Crop); Line 3 – Farmowners Multiple Peril; Line 19.3 – Commercial Auto No-Fault (personal injury protection); Line 19.4 – Other Commercial Auto Liability; Line 21.2 –Commercial Auto Physical Damage; Line 24 – Surety; Line 26 – Burglary and Theft; Professional Liability insurance as defined in 31 CFR 50.5(j)¹; private mortgage insurance; title insurance; financial guaranty insurance when issued by a monoline financial guaranty insurance corporation; medical malpractice insurance; health or life insurance, including group life insurance; Federal flood insurance; earthquake insurance reported under Line 12 of Statutory Page 14; and reinsurance or retrocessional reinsurance. Workers’ compensation insurance provided directly to qualified self-insureds is not reinsurance for purposes of the Program.

1.4Direct Written Premium

Direct written premium means the premium as defined for inclusion in column 1 of the Exhibit of Premiums and Losses of the NAIC Annual Statement or in an equivalent reporting requirement. The Federal Terrorism Policy Surcharge is not included in amounts reported as direct written premium.

Direct written premium to be reported on this form includes premium for all commercial property and casualty lines of insurance listed above in 1.3.1 issued by any insurer for insurance against all losses. Generally, premium amounts are to be included in the reporting on this form as they would be included in amounts reported to the NAIC or through an equivalent reporting requirement for the applicable surcharge period. Such premium amounts are to be broken out by policy year in order to facilitate Surcharge calculations. For months in which premiums are not reported to the NAIC or through an equivalent reporting requirement, the same definitions and process for completing this form shall apply.

The premium reported under Step One in Column 1A of this form is always cumulative for the applicable calendar year during an assessment period (i.e., January 1 through month-end of the reporting month). Column 1B is the direct written premium for the same calendar year prior to the start of the assessment period. Columns 1B and 1C must sum to Column 1A.

Some direct written premiums for lines of insurance listed under section 1.3.1 above and reported under Step One of this form may not be subject to the Federal Terrorism Policy Surcharge. Step Three will provide for the exclusion of such premiums from the calculation of the Federal Terrorism Policy Surcharge amount due to Treasury. Specifically:

1. Premiums for personal property and casualty insurance coverage (coverage primarily designed to cover personal, family, or household risk exposures) are not subject to the Federal Terrorism Policy Surcharge, even if reported under a line of business otherwise included in the definition of property casualty insurance under TRIA.

2. Premiums for any other insurance coverage that does not meet the definition of commercial property and casualty insurance are not subject to the Federal Terrorism Policy Surcharge. Such types of insurance are listed in 1.3.2 and are not subject to the Federal Terrorism Policy Surcharge, even if reported under a line of business otherwise included in the definition of property casualty insurance under TRIA.

________________________________________

¹ (j) Professional liability insurance means insurance coverage for liability arising out of the performance of professional or business duties related to a specific occupation, with coverage being tailored to the needs of the specific occupation. Examples include abstracters, accountants, insurance adjusters, architects, engineers, insurance agents and brokers, lawyers, real estate agents, stockbrokers and veterinarians. For purposes of this definition, professional liability insurance does not include directors and officers liability insurance.

3. In the cases of policies providing multiple insurance coverages where an insurer cannot identify the premium amount charged specifically for property and casualty insurance under the policy:

a. If an insurer has estimated that the portion of the premium amount charged for coverage other than property and casualty insurance is de minimis to the total premium for the policy, by Treasury regulation (31 CFR 50.74(c)(2)(i)) the insurer may impose and collect from the policyholder a surcharge amount based on the total direct written premium for the policy. As such, no adjustment is necessary to the direct written premium reported under Step One.

b. If an insurer has estimated that the portion of the premium amount charged for coverages other than commercial property and casualty insurance is not de minimis to the total premium for the policy, by Treasury regulation (31 CFR 50.74(c)(2)(ii)) the insurer shall impose and collect from the policyholder a Surcharge amount based on a reasonable estimate of the premium amount for the property and casualty insurance coverage under the policy. Therefore the portion of the premium charged for coverages other than commercial property and casualty insurance should be subtracted in Step Three.

1.5Insurers that do not Report to the NAIC via Statutory Page 14.

An insurer that does not report to the NAIC via Statutory Page 14 should only report direct written premium in Step 1 or Step 2 for classes or lines of business that include, at a minimum, the equivalent of one or more lines of business specified in General Instruction 1.3.1.  Thus, regardless of the description of the premium on another reporting form, all premium in Step 1 or Step 2 must include, the functional equivalent of a line of business as specified in General Instruction 1.3.1. Insurers that may be required to extract direct written premium information from other reporting forms for the purpose of this TRIP filing include alien surplus lines insurers, farm mutual insurers, county mutual insurers, captive insurers and federally-approved insurers.

Direct written premium includes all premiums, policy expense constants and fees defined as premium pursuant to the Statements of Statutory Accounting Principles established by the NAIC. Other types of payments that compensate the insurer for risk of loss (such as contributions, assessments, etc. for certain farm and county mutual insurers) must also be considered as part of direct written premium.

An insurer approved by a Federal agency for the purpose of offering property and casualty insurance in connection with maritime, energy or aviation activity should adjust its premium to reflect the limitations on scope of insurance coverage under the Program (i.e. to the extent of federal approval of commercial property and casualty insurance in connection with maritime, energy or aviation activities).

2Step by Step Calculations

2.1Step One

In Column 1A enter the sum of direct written premiums for the reporting month for all lines of business listed in section 1.3.1. When the reporting month coincides with a quarterly NAIC reporting period, the amount reported should be the cumulative, year to date direct written premium included in the amount reported, or to be reported, to the NAIC for all lines of business included in the Program. Columns 2-5 are to be used to report the premiums by policy year that comprise the amount reported in Column 1C. In column 1B enter the sum of the direct written premiums for the same calendar year prior to the start of the assessment period. The sum of Columns 2-5 should equal Column 1C premium. However, if necessary, additional columns (and sheets) may be added to complete the breakout of premiums by Policy Year and to account fully for the entry in column 1C.

Include premiums for all lines not reported via Statutory Page 14, but reported on a separate state form as discussed in General Instruction 1.5.

Include all premiums reported for any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, each of the U.S. Virgin Islands, and any other territory or possession of the United States.

Include all surplus lines premium written and reported for any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, each of the U.S. Virgin Islands, and any other territory or possession of the United States.

2.2 Step Two

Enter the amount of direct written premiums included in Column 1C of Step 1 that are for insurance coverage not to be included for the purposes of calculating the Federal Terrorism Policy Surcharge due Treasury. See General Instructions 1.4 for guidance. Columns 2-5 are to be used to report the premiums by policy year that comprise the amount reported in Column 1C.The sum of Columns 2-5 should equal Column 1C premium. However, if necessary, additional columns and sheets) may be added to complete the breakout of premiums by Policy Year and to account fully for the entry in Column 1

Include premiums for all lines not reported via Statutory Page 14, but reported on a separate state form as discussed in General Instruction 1.5.

Include all premiums reported for any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, each of the U.S. Virgin Islands, and any other territory or possession of the United States.

Include all surplus lines premium written and reported for any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, each of the U.S. Virgin Islands, and any other territory or possession of the United States.

2.3 Step Three

Enter the Step 1 totals, and then subtract the Step 2 premiums to determine the insurer’s cumulative direct written premium for the applicable month subject to the Federal Terrorism Policy Surcharge.

2.4 Step Four

Enter the Step 4 totals and multiply by the applicable surcharge percentage(s) to determine the amount of Federal Terrorism Policy Surcharge for the applicable month. Note that Column 1 of Step 4 is not computed, as different surcharge percentages may be applicable to the direct written premium being reported for individual policy years. The Step 4 Total Due is the amount of surcharge to be remitted Treasury for the applicable month.

OMB No. XXXX-XXXX Expiration XXXX, 20XX

TRIP 04A