[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3644 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3644

   To establish a nonpartisan Commission on Natural Catastrophe Risk 
           Management and Insurance, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 24, 2007

  Mr. Shays (for himself and Mr. Blumenauer) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
   To establish a nonpartisan Commission on Natural Catastrophe Risk 
           Management and Insurance, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Commission on 
Natural Catastrophe Risk Management and Insurance Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Establishment.
Sec. 4. Membership.
Sec. 5. Duties of the Commission.
Sec. 6. Timing.
Sec. 7. Powers of the Commission.
Sec. 8. Commission personnel matters.
Sec. 9. Termination.
Sec. 10. Authorization of appropriations.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) catastrophic hazards, including tornadoes, earthquakes, 
        volcanoes, landslides, tsunamis, flooding, and hurricanes, 
        directly affect hundreds of millions of people each year;
            (2) during the 1990s, 2,800 natural disasters killed more 
        than 500,000 people and directly affected 1,300,000,000 people 
        worldwide;
            (3) property damage from natural catastrophes has 
        dramatically increased in recent decades, roughly doubling 
        every seven years--a 14-fold increase over the past 40 years;
            (4) risk costs have particularly soared in coastal areas, 
        where hurricane frequency and severity has significantly 
        increased, along with home values and building costs;
            (5) increased risk costs are being reflected in increased 
        catastrophe insurance and reinsurance costs;
            (6) an inefficient legal and regulatory environment in some 
        States has further exacerbated insurance cost increases, 
        including through ineffective price controls, restrictions on 
        capital movement, sub-optimal solvency regulation, and 
        duplicative or unnecessary regulation;
            (7) consumers further suffer from temporary rate and 
        availability volatility after major catastrophes while the 
        marketplace adjusts to the losses;
            (8) government catastrophe mitigation requirements have 
        been sub-optimal, sometimes ineffective, and uncoordinated;
            (9) some State efforts to reduce insurance prices in 
        catastrophe-prone areas have sometimes reduced long-term 
        availability and competitive affordability of coverage, as well 
        as subsidized excessive development in environmentally 
        sensitive areas at the expense of taxpayers;
            (9) several proposals have been introduced in the Congress 
        to address the affordability of natural catastrophe insurance, 
        but there is little consensus on the appropriate role of the 
        Federal Government in facilitating the private insurance 
        marketplace while avoiding cross-subsidies; and
            (10) therefore, an efficient and effective approach to 
        assessing natural catastrophe risk management and insurance is 
        to establish a nonpartisan commission to study the management 
        of natural catastrophe risk, and to require such commission to 
        report to the Congress on its findings before the next 
        hurricane season begins.

SEC. 3. ESTABLISHMENT.

    There is established a nonpartisan Commission on Natural 
Catastrophe Risk Management and Insurance (in this Act referred to as 
the ``Commission'').

SEC. 4. MEMBERSHIP.

    (a) Appointment.--The Commission shall be composed of 16 members, 
of whom--
            (1) 2 members shall be appointed by the Majority Leader of 
        the Senate;
            (2) 2 members shall be appointed by the Minority Leader of 
        the Senate;
            (3) 2 members shall be appointed by the Speaker of the 
        House of Representatives;
            (4) 2 members shall be appointed by the Minority Leader of 
        the House of Representatives;
            (5) 2 members shall be appointed by the Chairman of the 
        Committee on Banking, Housing, and Urban Affairs of the Senate;
            (6) 2 members shall be appointed by the Ranking Member of 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate;
            (7) 2 members shall be appointed by the Chairman of the 
        Committee on Financial Services of the House of 
        Representatives; and
            (8) 2 members shall be appointed by the Ranking Member of 
        the Committee on Financial Services of the House of 
        Representatives.
    (b) Qualification of Members.--
            (1) In general.--Members of the Commission shall be 
        appointed under subsection (a) from among persons who--
                    (A) have expertise in insurance, reinsurance, 
                insurance regulation, policyholder concerns, emergency 
                management, risk management, public finance, financial 
                markets, actuarial analysis, flood mapping and 
                planning, structural engineering, building standards, 
                land use planning, natural catastrophes, meteorology, 
                seismology, environmental issues, or other pertinent 
                qualifications or experience; and
                    (B) are not officers or employees of the United 
                States Government or of any State government.
            (2) Diversity.--In making appointments to the Commission--
                    (A) every effort shall be made to ensure that the 
                members are representative of a broad cross section of 
                perspectives within the United States; and
                    (B) each member of Congress described in subsection 
                (a) shall appoint not more than 1 person from any 
                single primary area of expertise described in paragraph 
                (1)(A) of this subsection.
    (c) Period of Appointment.--
            (1) In general.--Each member of the Commission shall be 
        appointed for the duration of the Commission.
            (2) Vacancies.--A vacancy on the Commission shall not 
        affect its powers, but shall be filled in the same manner as 
        the original appointment.
    (d) Quorum.--
            (1) Majority.--A majority of the members of the Commission 
        shall constitute a quorum, but a lesser number, as determined 
        by the Commission, may hold hearings.
            (2) Approval actions.--All recommendations and reports of 
        the Commission required by this Act shall be approved only by a 
        two-thirds vote of all of the members of the Commission.
    (e) Chairperson.--The Commission shall, by majority vote of all of 
the members, select 1 member to serve as the Chairperson of the 
Commission (in this Act referred to as the ``Chairperson'').
    (f) Meetings.--The Commission shall meet at the call of its 
Chairperson or a majority of the members.

SEC. 5. DUTIES OF THE COMMISSION.

    The Commission shall examine and report to the Congress on the 
natural catastrophe insurance marketplace, including the extent to 
which insurance costs and availability are affected by the factors 
described in section 2, which factors the Federal Government can and 
should address to increase catastrophe insurance availability and 
competitiveness, and which actions the Federal Government can undertake 
to achieve this goal without requiring a long-term cross-subsidy from 
the taxpayers. In developing its report, the Commission shall 
consider--
            (1) the current condition of, as well as the outlook for, 
        the availability and affordability of insurance and reinsurance 
        for natural catastrophes in all regions of the United States;
            (2) the current ability of States, communities, and 
        individuals to mitigate their natural catastrophe risks, 
        including the affordability and feasibility of such activities;
            (3) the impact of Federal and State laws, regulations, and 
        policies (including rate regulation, market access 
        requirements, reinsurance regulations, accounting and tax 
        policies, State residual markets, and State catastrophe funds) 
        on--
                    (A) the affordability and availability of 
                catastrophe insurance;
                    (B) the ability of the private insurance market to 
                cover losses inflicted by natural catastrophes;
                    (C) the commercial and residential development of 
                high-risk areas; and
                    (D) the costs of natural catastrophes to Federal 
                and State taxpayers;
            (4) the benefits and costs of--
                    (A) a national, regional, or other pooling 
                mechanism designed to provide adequate insurance 
                coverage and increased underwriting capacity to 
                insurers and reinsurers, including private-public 
                partnerships to increase insurance capacity in 
                constrained markets, including proposed Federal natural 
                catastrophe insurance programs (specifically addressing 
                the costs to taxpayers, tax equity considerations, and 
                the record of other government insurance programs, 
                particularly with regard to charging actuarially sound 
                prices);
                    (B) improving Federal and State tax policy to allow 
                insurers or individuals to set aside catastrophe 
                reserves;
                    (C) directing existing Federal agencies to begin 
                selling catastrophe insurance to individuals;
                    (D) creating a consortium of Federal and State 
                officials to facilitate state catastrophe bonds and 
                reinsurance purchasing as well as providing temporary 
                Federal disaster loans to the States for insurance 
                purposes;
                    (E) expanding the Liability Risk Retention Act of 
                1986 to allow businesses to pool together to buy 
                insurance and set up their own insurance funds;
                    (F) providing temporary Federal assistance to low-
                income individual homeowners whose catastrophe 
                insurance rates have increased beyond a certain level 
                after a major disaster, with the possibility that the 
                assistance would be repaid upon sale of the underlying 
                home;
                    (H) providing for limited Federal development and 
                oversight of the sale of catastrophe insurance in high-
                risk areas during periods of relative unavailability; 
                and
                    (I) facilitating further growth of the catastrophe 
                bond marketplace and other competitive alternatives to 
                the traditional insurance and reinsurance marketplace;
            (5) the present and long-term financial condition of State 
        residual markets and catastrophe funds in high-risk regions, 
        including the likelihood of insolvency following a natural 
        catastrophe, the concentration of risks within such funds, the 
        reliance on post-event assessments and State funding, the 
        adequacy of rates, and the degree to which such entities have 
        been actuarially solvent in comparison to comparably sized 
        private insurers;
            (6) the need for strengthened land use regulations and 
        building codes in States at high risk for natural catastrophes, 
        and methods to strengthen the risk assessment and enforcement 
        of structural mitigation and vulnerability reduction measures, 
        such as zoning and building code compliance;
            (7) the ability of the private insurance market in the 
        United States--
                    (A) to cover insured losses caused by natural 
                catastrophes, including an estimate of the maximum 
                amount of insured losses that could be sustained during 
                a single year and the probability of natural 
                catastrophes occurring in a single year that would 
                inflict more insured losses than the United States 
                insurance and reinsurance markets could sustain; and
                    (B) to recover after covering substantial insured 
                losses caused by natural catastrophes;
            (8) the impact that demographic trends could have on the 
        amount of insured losses inflicted by future natural 
        catastrophes;
            (9) the appropriate role, if any, for the Federal 
        Government in stabilizing the property and casualty insurance 
        and reinsurance markets; and
            (10) the role of the Federal, State, and local governments 
        in providing incentives for feasible risk mitigation efforts.

SEC. 6. TIMING.

    Before the beginning of the 2008 hurricane season, which for 
purposes of this section shall be considered to be June 1, 2008, the 
Commission shall submit to the Committee on Financial Services of the 
House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate a final report containing--
            (1) a detailed statement of the findings and assessments 
        conducted by the Commission pursuant to section 5; and
            (2) specific and detailed recommendations for legislative, 
        regulatory, administrative, or other actions at the Federal, 
        State, or local levels that the Commission considers 
        appropriate, in accordance with the requirements of section 5.

SEC. 7. POWERS OF THE COMMISSION.

    (a) Meetings; Hearings.--The Commission may hold such hearings, sit 
and act at such times and places, take such testimony, and receive such 
evidence as the Commission considers necessary to carry out the 
purposes of this Act. Members may attend meetings of the Commission and 
vote in person, via telephone conference, or via video conference.
    (b) Authority of Members or Agents of the Commission.--Any member 
or agent of the Commission may, if authorized by the Commission, take 
any action which the Commission is authorized to take by this Act.
    (c) Obtaining Official Data.--
            (1) Authority.--Notwithstanding any provision of section 
        552a of title 5, United States Code, the Commission may secure 
        directly from any department or agency of the United States any 
        information necessary to enable the Commission to carry out 
        this Act.
            (2) Procedure.--Upon request of the Chairperson, the head 
        of such department or agency shall furnish to the Commission 
        the information requested.
    (d) Postal Services.--The Commission may use the United States 
mails in the same manner and under the same conditions as other 
departments and agencies of the Federal Government.
    (e) Administrative Support Services.--Upon the request of the 
Commission, the Administrator of General Services shall provide to the 
Commission, on a reimbursable basis, any administrative support 
services necessary for the Commission to carry out its responsibilities 
under this Act.
    (f) Acceptance of Gifts.--The Commission may accept, hold, 
administer, and utilize gifts, donations, and bequests of property, 
both real and personal, for the purposes of aiding or facilitating the 
work of the Commission. The Commission shall issue internal guidelines 
governing the receipt of donations of services or property.
    (g) Volunteer Services.--Notwithstanding the provisions of section 
1342 of title 31, United States Code, the Commission may accept and 
utilize the services of volunteers serving without compensation. The 
Commission may reimburse such volunteers for local travel and office 
supplies, and for other travel expenses, including per diem in lieu of 
subsistence, as authorized by section 5703 of title 5, United States 
Code.
    (h) Federal Property and Administrative Services Act of 1949.--
Subject to the Federal Property and Administrative Services Act of 
1949, the Commission may enter into contracts with Federal and State 
agencies, private firms, institutions, and individuals for the conduct 
of activities necessary to the discharge of its duties and 
responsibilities.
    (i) Limitation on Contracts.--A contract or other legal agreement 
entered into by the Commission may not extend beyond the date of the 
termination of the Commission.

SEC. 8. COMMISSION PERSONNEL MATTERS.

    (a) Travel Expenses.--The members of the Commission shall be 
allowed travel expenses, including per diem in lieu of subsistence, at 
rates authorized for employees of agencies under subchapter I of 
chapter 57 of title 5, United States Code, while away from their homes 
or regular places of business in the performance of services for the 
Commission.
    (b) Subcommittees.--The Commission may establish subcommittees and 
appoint members of the Commission to such subcommittees as the 
Commission considers appropriate.
    (c) Staff.--Subject to such policies as the Commission may 
prescribe, the Chairperson may appoint and fix the pay of such 
additional personnel as the Chairperson considers appropriate to carry 
out the duties of the Commission. The Commission shall confirm the 
appointment of the executive director by majority vote of all of the 
members of the Commission.
    (d) Applicability of Certain Civil Service Laws.--Staff of the 
Commission may be--
            (1) appointed without regard to the provisions of title 5, 
        United States Code, governing appointments in the competitive 
        service; and
            (2) paid without regard to the provisions of chapter 51 and 
        subchapter III of chapter 53 of that title relating to 
        classification and General Schedule pay rates, except that an 
        individual so appointed may not receive pay in excess of the 
        annual rate of basic pay prescribed for GS-15 of the General 
        Schedule under section 5332 of that title.
    (e) Experts and Consultants.--In carrying out its objectives, the 
Commission may procure temporary and intermittent services of 
consultants and experts under section 3109(b) of title 5, United States 
Code, at rates for individuals which do not exceed the daily equivalent 
of the annual rate of basic pay prescribed for GS-15 of the General 
Schedule under section 5332 of that title.
    (f) Detail of Government Employees.--Upon request of the 
Chairperson, any Federal Government employee may be detailed to the 
Commission to assist in carrying out the duties of the Commission--
            (1) on a reimbursable basis; and
            (2) such detail shall be without interruption or loss of 
        civil service status or privilege.

SEC. 9. TERMINATION.

    The Commission shall terminate 90 days after the date on which the 
Commission submits its report under section 6.

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Commission, such 
sums as may be necessary to carry out this Act, to remain available 
until expended.
                                 <all>