II Calendar No. 462 110th CONGRESS 1st Session S. 2286 IN THE SENATE OF THE UNITED STATES November 1, 2007 Mr. Dodd, from the Committee on Banking, Housing, and Urban Affairs, reported the following original bill; which was read twice and placed on the calendar A BILL To establish a nonpartisan commission on natural catastrophe risk management and insurance, and for other purposes.

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. Report. Sec. 7. Powers of the Commission. Sec. 8. Commission personnel matters. Sec. 9. Termination. Sec. 10. Authorization of appropriations.

2.

Findings

Congress finds that— (1)Hurricanes Katrina, Rita, and Wilma, which struck the United States in 2005, caused, by some estimates, in excess of $200,000,000,000 in total economic losses; (2)many meteorologists predict that the United States is in a period of increased hurricane activity; (3)the Federal Government and State governments have provided billions of dollars to pay for losses from natural catastrophes, including hurricanes, earthquakes, volcanic eruptions, tsunamis, tornados, flooding, wildfires, droughts, and other natural catastrophes; (4)many Americans are finding it increasingly difficult to obtain and afford property and casualty insurance coverage; (5)some insurers are not renewing insurance policies, are excluding certain risks, such as wind damage, and are increasing rates and deductibles in some markets; (6)the inability of property and business owners in vulnerable areas to obtain and afford property and casualty insurance coverage endangers the national economy and public health and safety; (7)almost every State in the United States is at risk of a natural catastrophe, including hurricanes, earthquakes, volcanic eruptions, tsunamis, tornados, flooding, wildfires, droughts, and other natural catastrophes; (8)building codes and land use regulations play an indispensable role in managing catastrophe risks, by preventing building in high risk areas and ensuring that appropriate mitigation efforts are completed where building has taken place; (9)several proposals have been introduced in Congress to address the affordability and availability of natural catastrophe insurance across the United States, but there is no consensus on what, if any, role the Federal Government should play; and (10)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 timely report to Congress on its findings.

3.

Establishment

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

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 majority 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.

5.

Duties of the Commission

The Commission shall examine the risks posed to the United States by natural catastrophes, and means for mitigating those risks and for paying for losses caused by natural catastrophes, including assessing— (1)the condition of the property and casualty insurance and reinsurance markets prior to and in the aftermath of Hurricanes Katrina, Rita, and Wilma in 2005, and the 4 major hurricanes that struck the United States in 2004; (2)the current condition of, as well as the outlook for, the availability and affordability of insurance in all regions of the country; (3)the current ability of States, communities, and individuals to mitigate their natural catastrophe risks, including the affordability and feasibility of such activities; (4)the ongoing exposure of the United States to natural catastrophes, including hurricanes, earthquakes, volcanic eruptions, tsunamis, tornados, flooding, wildfires, droughts, and other natural catastrophes; (5)the catastrophic insurance and reinsurance markets and the relevant practices in providing insurance protection to different sectors of the American population; (6)implementation of a catastrophic insurance system that can resolve key obstacles currently impeding broader implementation of catastrophic risk management and financing with insurance; (7)the financial feasibility and sustainability of 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; (8)methods to promote public insurance policies to reduce losses caused by natural catastrophes in the uninsured sectors of the American population; (9)approaches for implementing a public or private insurance scheme for low-income communities, in order to promote risk reduction and insurance coverage in such communities; (10)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 capacity 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; (11)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, and the adequacy of rates; (12)the role that innovation in financial services could play in improving the affordability and availability of natural catastrophe insurance, specifically addressing measures that would foster the development of financial products designed to cover natural catastrophe risk, such as risked-linked securities; (13)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; (14)the benefits and costs of proposed Federal natural catastrophe insurance programs (including the Federal Government providing reinsurance to State catastrophe funds, private insurers, or other entities), 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); (15)the ability of the United States private insurance market— (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; (16)the impact that demographic trends could have on the amount of insured losses inflicted by future natural catastrophes; (17)the appropriate role, if any, for the Federal Government in stabilizing the property and casualty insurance and reinsurance markets; and (18)the role of the Federal, State, and local governments in providing incentives for feasible risk mitigation efforts.

6.

Report

On December 1, 2008, the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a final report containing— (1)a detailed statement of the findings and assessments conducted by the Commission pursuant to section 5; and (2)any 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.

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.

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.

9.

Termination

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

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.

November 1, 2007 Read twice and placed on the calendar