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1 CBO Estimate of the Statutory Pay-as-You-Go Effects of H.R. 4634, the Terrorism Risk Insurance Program Reauthorization Act of 2019, as Ordered Reported by the House Committee on Financial Services on October 31, 2019 1 (November 18, 2019)

handle is hein.congrec/cbotrrsk0001 and id is 1 raw text is: November 18, 2019 By Fiscal Year, Millions of Dollars 2020 2021 2022 2023 2024 2025 2026 2027 2028 Net Increase or Decrease (-) in the Deficit Pay-As-You-Go Effect 0 160 120 -120 -490 390 250 20 -570 -1,010 Memorandum:a Changes in Outlays 0 160 350 470 550 610 660 700 540 320 1530 4.360 Changes in Revenues 0 0 230 590 1,040 220 410 680 1,110 1,330 1860 5.610 The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays and revenues that are subject to those procedures are shown here. H.R. 4634 would extend the Terrorism Risk Insurance Program for seven years through the end of calendar year 2027. That program requires the Treasury to provide financial assistance to property and casualty insurance companies that receive claims from commercial policyholders affected by a qualifying terrorist attack. Outlays reflect CBO's estimate of the annual expected value of federal payments to insurance companies; revenues reflect an assessment placed on all property and casualty insurance companies equal to 140 percent of the expected federal costs that are less than a statutorily specified amount. Under H.R. 4634, all of those assessments must be collected by the Treasury by the end of fiscal year 2029. CBO anticipates that the Treasury would pay a substantial amount of insurance claims after the end of fiscal year 2029 because the value of such claims are typically disputed for many years following a catastrophic loss. By extending requirements contained in the Terrorism Risk Insurance Act, H.R. 4634 would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). The bill would require public and private entities to offer terrorism insurance, to collect and report information to the federal government, and to collect surcharges from policyholders. The bill also would preempt some state laws that regulate insurance. CBO estimates that the aggregate cost for the intergovernmental mandates would exceed the threshold established in UMRA ($82 million in 2019, adjusted annually for inflation) in at least one of the first five years the mandates are in effect. The cost of the private-sector mandates would exceed the threshold established in UMRA in each of the first five years the mandates are in effect ($164 million in 2019, adjusted annually for inflation). a. Positive numbers represent increases in outlays and revenues. The deficit effect is calculated by subtracting revenues from outlays. Staff Contacts: David Hughes (federal costs) Rachel Austin (mandates)

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