50.50—Federal share of compensation.
(a)
General. (1) The Treasury
will pay the Federal share of compensation for
insured losses as provided in section 103 of the
Act once a Certification of Loss required by §
50.53 is deemed sufficient. The Federal share of
compensation under the Program shall be:
(i)
90 percent of that portion of the insurer's
aggregate insured losses that exceed its insurer
deductible during each Program Year through
Program Year 4, and
(ii)
85 percent of that portion of the
insurer's aggregate insured losses that exceed its
insurer deductible during Program Year 5 and any
Program Year thereafter.
(2)
(ii)
entages in paragraphs (a)(1)(i) and
(ii) are both subject to any adjustments in §
50.51 and the cap of $100 billion as provided in
section 103(e)(2) of the Act.
(b) Program Trigger amounts.
Notwithstanding paragraph (a) or anything in this
Subpart to the contrary, no Federal share of
compensation will be paid by Treasury unless the
aggregate industry insured losses resulting from a
certified act of terrorism occurring after March 31, 2006 exceed the following
amounts:
(1)
For a certified act of terrorism occurring
after March 31, 2006 and before January 1, 2007:
$50 million;
(2)
For a certified act of terrorism occurring
in 2007 and any Program Year thereafter: $100
million.
(c)
Insured losses after March 31,
2006. For all purposes of subpart F, insured
loss or insured losses or aggregate insured losses
resulting from acts of terrorism after March 31,
2006 shall be limited to those insured losses
resulting from Program Trigger events.
(d)
Conditions for payment of Federal
share. Subject to paragraph (e) of this
section, Treasury shall pay the appropriate amount
of the Federal share of compensation to an insurer
upon a determination that:
(1)
The insurer is an entity, including an
affiliate thereof, that meets the requirements of
§ 50.5(f) ;
(2)
The insurer's insured losses, as defined in
§ 50.5(e) and limited by § 50.50(c) (including the
allocated dollar value of the insurer's
proportionate share of insured losses from a State
residual market insurance entity or State workers'
compensation fund as described in § 50.35 ), have
exceeded its insurer deductible as defined in §
50.5(g) ;
(3)
The insurer has paid or is prepared to pay
an underlying insured loss, based on a filed claim
for the insured loss;
(4)
Neither the insurer's claim for Federal
payment nor any underlying claim for an insured
loss is fraudulent, collusive, made in bad faith,
dishonest or otherwise designed to circumvent the
purposes of the Act and regulations;
(5)
The insurer had provided a clear and
conspicuous disclosure as required by §§ 50.10
through 50.19 and a cap disclosure as required by
§ 50.15 ;
(6)
The insurer offered coverage for insured
losses and the offer was accepted by the insured
prior to the occurrence of the loss;
(7)
The insurer took all steps reasonably
necessary to properly and carefully investigate
the underlying insured loss and otherwise
processed the underlying insured loss using
appropriate insurance business practices;
(8)
The insured losses submitted for payment
are within the scope of coverage issued by the
insurer under the terms and conditions of the
policies for commercial property and casualty
insurance as defined in § 50.5(n); and
(9)
The procedures specified in this Subpart
have been followed and all conditions for payment
have been met.
(e) Adjustments.
Treasury may
subsequently adjust, including requiring repayment
of, any payment made under paragraph (d) of this
section in accordance with its authority under the
Act.
(f)
Suspension of payment for other
insured losses. Upon a determination by
Treasury that an insurer has failed to meet any of
the requirements for payment specified in
paragraph (d) of this section for a particular
insured loss, Treasury may suspend payment of the
Federal share of compensation for all other
insured losses of the insurer pending
investigation and audit of the insurer's insured
losses.
(g) Aggregate industry losses.
Treasury will determine the amount of aggregate
industry insured losses resulting from a certified
act of terrorism. If such aggregate industry
insured losses exceed the applicable Program
Trigger amounts specified in paragraph (b) of this
section, Treasury will publish notice in the Federal Register that the act of
terrorism is a Program Trigger event.