Certified vs triggers
What is the relationship between certified event vs the trigger to receive federal payment?
First the terrorism event have to be certified(>5M and...), then when it reach 200M aggregate loss (and ...) for this event, government reimbursement starts? Is this correct?
Comments
Yes, that's correct.
The trigger to receive federal payments requires 3 things. The first thing is that the event must be certified. The second thing is >200m losses. The third thing is that the deductible is met.
I am confused about "the state cannot enact its own definition of terrorism" because who decides whether or not an act is terrorism is "The Secretary of State, Secretary of the Treasury and Attorney General". Is it because they have to adhere to some rules?
If I understand your question, the SoS, SoT, and AG would gather all available information and decide whether the particular act can be certified as terrorism. This is just another way of asking whether the definition of terrorism has been satisfied, and it's done at the federal level. There are 4 things that must occur for this federal definition to be satisfied: [Hint: 5-DUC]
Once these conditions are met then the federal government may begin paying (if aggregate losses are also > 200m and the deductible has been met.)
But suppose instead that each state had it's own definition or certification standards for terrorism and it did not need to be certified by the SoS, SoT, and AG. The state could, for example, say that aggregate insurer losses only have to be $1,000 or some low amount so that almost every type of act could be certified as terrorism. They would do this so they could more easily get federal money. It's for this reason that states are not allowed to create their own definition.
I think I've answered your question but please let me know if I haven't.
Thank you