[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6944 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 6944

 To require the Secretary of the Treasury to establish a catastrophic 
       property loss reinsurance program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 10, 2024

Mr. Schiff (for himself, Ms. Tlaib, Mr. Mullin, Ms. Salinas, Ms. Hoyle 
  of Oregon, Ms. Lofgren, and Ms. Brownley) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To require the Secretary of the Treasury to establish a catastrophic 
       property loss reinsurance program, 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.

    This Act may be cited as the ``Incorporating National Support for 
Unprecedented Risks and Emergencies Act'' or the ``INSURE Act''.

SEC. 2. CATASTROPHIC PROPERTY LOSS REINSURANCE PROGRAM.

    (a) In General.--The Secretary of the Treasury shall, not later 
than 4 years after the date of the enactment of this section, establish 
a catastrophic property loss reinsurance program (in this Act referred 
to as the ``Program'') to provide reinsurance for qualifying primary 
insurance companies.
    (b) Eligibility.--An insurer is qualified to participate in the 
Program established by the Secretary under this section if such 
insurer--
            (1) offers an all-perils property insurance policy for--
                    (A) residential property insurance policies; or
                    (B) commercial property insurance policies; and
            (2) offers a loss prevention partnership with the 
        policyholder to encourage investments and activities that 
        reduce insured and economic losses from a catastrophe peril.
    (c) Consultation.--The Secretary may contract with reinsurance 
brokers and consultants to assist the Secretary in the design and 
management of the Program.
    (d) Program Phase-In Timeline.--The Secretary shall--
            (1) not later than January 1 of the year beginning 4 years 
        after the date of the enactment of this section, operate the 
        Program for the peril of flood;
            (2) not later than January 1 of the year beginning 5 years 
        after the date of the enactment of this section, operate the 
        Program for the perils of wind and hurricane;
            (3) not later than January 1 of the year beginning 6 years 
        after the date of the enactment of this section, operate the 
        Program for the perils of severe convective storm and wildfire; 
        and
            (4) not later than the earlier of January 1 of the year 
        beginning 8 years after the date of the enactment of this 
        section or the date on which the feasibility report described 
        in paragraph (2) of section 4 is submitted, operate the Program 
        for the peril of earthquake.
    (e) National Flood Insurance Program Discontinuation.--On the date 
that the Secretary begins operating the Program with respect to the 
peril of flood, the Administrator of the Federal Emergency Management 
Agency shall--
            (1) discontinue the issuance and renewal of policies under 
        the national flood insurance program; and
            (2) continue to operate the national flood insurance 
        program until--
                    (A) policies under such program issued prior to the 
                discontinuation date under paragraph (1) have expired; 
                and
                    (B) all claims on policies under such program 
                issued prior to the discontinuation date have been 
                closed.
    (f) Threshold for Payment.--
            (1) In general.--The Secretary shall, after consulting with 
        the advisory committee established under subsection (i), 
        establish a financial threshold at which a participating 
        insurer may receive amounts from the fund established under 
        subsection (j).
            (2) Threshold calculation.--The threshold established under 
        paragraph (1) shall be an amount not greater than 40 percent of 
        the probable maximum loss of an individual participating 
        insurer for each catastrophe peril included in the Program.
            (3) Considerations.--In establishing the threshold 
        described in paragraph (1), the Secretary shall consider--
                    (A) the amount of reinsurance necessary to 
                meaningfully reduce the cost to the participating 
                insurer to--
                            (i) provide coverage for catastrophe perils 
                        covered by the Program; and
                            (ii) encourage States to require 
                        participating insurers to offer an all-perils 
                        property insurance policy;
                    (B) the levels of primary insurer retention and 
                private reinsurance market capacity necessary to--
                            (i) promote stable and competitive markets 
                        for catastrophe reinsurance; and
                            (ii) incentivize the establishment by 
                        private parties of capital market alternatives 
                        to reinsurance, for example the creation of a 
                        market for catastrophe bonds; and
                    (C) the role of the Program in promoting 
                investments by participating insurers that would be 
                aimed at decreasing losses.
    (g) Premiums.--
            (1) In general.--The Secretary shall require participating 
        insurers to pay a premium to the Secretary each quarter.
            (2) Premium amount considerations.--The amount of the 
        premium required under paragraph (1) shall reflect only the 
        following considerations:
                    (A) The expected average annual losses for the 
                participating insurer, as calculated by the Secretary 
                based on the exposure of such participating insurer.
                    (B) The administrative costs to administer and 
                manage the Program.
            (3) Consultation.--The Secretary shall consult with the 
        advisory committee established under subsection (i) when 
        establishing premium amounts and may contract for services to 
        assist in the establishment of premium amounts.
            (4) Minimum premium required.--The Secretary may not 
        establish any premium that is less than 50 percent of the 
        amount equal to the sum of the--
                    (A) expected average annual losses for the 
                participating insurer, as calculated by the Secretary 
                based on the exposure of such participating insurer; 
                and
                    (B) administrative costs to administer and manage 
                the Program.
            (5) Premium adjustments.--The Secretary shall adjust 
        premiums each quarter for each participating insurer to reflect 
        material changes in the exposure of such insurer.
            (6) Premium increases.--Excluding any adjustment made under 
        paragraph (5), the Secretary may increase premiums for a 
        participating insurer not more than 7 percent annually.
    (h) Loss Prevention Partnerships.--
            (1) In general.--The Secretary, in coordination with the 
        advisory committee established under subsection (i), State 
        insurance agencies, and State and Federal emergency management 
        agencies, shall develop a list of activities that qualify as 
        loss prevention partnerships for purposes of this section. The 
        list may include the following activities:
                    (A) Participating insurers providing amounts to 
                insured parties to cover the cost, in whole or in part, 
                of activities aimed at reducing losses to the insured 
                party.
                    (B) Participating insurers making coverage 
                contingent upon the implementation of a loss prevention 
                activity by a potential insured party.
            (2) Activities excluded from loss prevention 
        partnerships.--The Secretary, State insurance agencies, and 
        State and Federal emergency management may not include the 
        following activities as loss prevention partnerships for 
        purposes of this section:
                    (A) The provision of an insurance premium discount 
                for an investment by an insured party or potential 
                insured party in an activity designed to reduce the 
                losses of the participating insurer, absent an 
                investment by the participating insurer.
                    (B) The provision of general information about loss 
                prevention.
    (i) Advisory Committee.--
            (1) In general.--The Secretary shall establish an advisory 
        committee to advise the Secretary with respect to the Program.
            (2) Membership.--The committee established in paragraph (1) 
        shall include the following members:
                    (A) 5 members representing consumer organizations 
                engaged in fair housing, insurance, environmental, 
                climate, and technology advocacy.
                    (B) 3 members selected from individual primary 
                insurance companies selling property insurance 
                policies, including one large national insurer, one 
                medium sized regional insurer, and one small insurer.
                    (C) 1 global reinsurer active in United States 
                property insurance markets.
                    (D) 1 domestic-focused reinsurer active in United 
                States property insurance markets.
                    (E) 2 insurance regulators from a State, Territory, 
                or the District of Colombia.
                    (F) 2 State legislators who serve on State 
                legislative committees with oversight over insurance 
                matters and who are not employed directly or indirectly 
                by any person or organization engaged in the business 
                of insurance.
                    (G) 2 members selected from independent insurance 
                agents who serve traditionally under-served areas.
                    (H) 1 representative from a mortgage lender.
                    (I) 1 representative from a bank.
                    (J) 1 representative from each of the following 
                agencies:
                            (i) The Department of Housing and Urban 
                        Development.
                            (ii) The Department of Health and Human 
                        Services.
                            (iii) The Federal Housing Finance Agency.
                            (iv) The Department of Veterans Affairs.
                            (v) The Department of Agriculture.
                            (vi) The Federal Emergency Management 
                        Agency.
                            (vii) The Office of Management and Budget.
                            (viii) The Environmental Protection Agency.
                    (K) 1 representative from the Financial Stability 
                Oversight Council.
    (j) Federal Catastrophe Reinsurance Fund.--
            (1) In general.--The Secretary shall establish the Federal 
        Catastrophe Reinsurance Fund (in this section referred to as 
        the ``Fund'') to hold and invest premiums paid by participating 
        insurers.
            (2) Issuance of notes and bonds.--
                    (A) In general.--If amounts in the Fund are 
                insufficient to pay obligations to participating 
                insurers, the Secretary shall issue notes and bonds 
                under this paragraph, the proceeds of which shall be 
                used for payment obligations to participating insurers.
                    (B) Terms.--Notes and bonds issued under this 
                paragraph shall be in such form and denominations, and 
                shall be subject to such terms and conditions of issue, 
                conversion, redemption, maturation, and payment as the 
                Secretary may prescribe and shall be fully and 
                unconditionally guaranteed both as to interest and 
                principal by the United States, and such guaranty shall 
                be expressed on the face of each bond.
                    (C) Interest.--Notes and bonds issued under this 
                paragraph shall bear interest at a rate not less than 
                the current average yield on outstanding market 
                obligations of the United States of comparable maturity 
                during the month preceding the issuance of the 
                obligation as determined by the Secretary.
                    (D) Treatment.--All notes and bonds issued under 
                this paragraph, and the interest on credits with 
                respect to such obligations, shall not be subject to 
                taxation by any State, county, municipality, or local 
                taxing authority.
                    (E) Satisfaction.--The Secretary shall utilize 
                investment revenue from the Fund to satisfy any notes 
                or bonds issued under this paragraph.
    (k) Data Collection.--
            (1) In general.--The Secretary shall--
                    (A) establish a statistical plan for quarterly 
                reporting by participating insurers of policy-level 
                claim transaction data;
                    (B) consult with the advisory committee established 
                under subsection (i) and the National Association of 
                Insurance Commissioners with respect to--
                            (i) the contents of the statistical plan; 
                        and
                            (ii) the method of data collection;
                    (C) collect quarterly reports from each 
                participating insurer that include--
                            (i) a description of all exposures covered 
                        by the Program at the time of the submission of 
                        the report; and
                            (ii) a list of the type and amount of all 
                        claims made in the previous quarter;
                    (D) in a manner that does not risk public 
                disclosure of personally identifiable information of 
                policyholders, provide the quarterly reports received 
                under subparagraph (C) to--
                            (i) the Director of the Office of Financial 
                        Research to assess risk to--
                                    (I) the financial stability of the 
                                United States; and
                                    (II) international financial 
                                systems arising from United States 
                                property insurance markets, including 
                                lack of available property insurance or 
                                inadequate coverage from property 
                                insurance;
                            (ii) the Director of the Federal Insurance 
                        Office to assess the risks to the financial 
                        stability arising from under-insurance of 
                        property insurance policies covering 
                        catastrophe perils, including in traditionally 
                        underserved insurance markets;
                            (iii) the head of the department of 
                        insurance in each State; and
                            (iv) any other Federal, State, or local 
                        government entity that, as determined by the 
                        Secretary, is related to--
                                    (I) catastrophe loss prevention, 
                                mitigation, or recovery; or
                                    (II) the promotion of competitive 
                                property insurance markets; and
                    (E) make the data collected under this paragraph 
                available online in a manner that does not risk public 
                disclosure of personally identifiable information of 
                policyholders.
            (2) Contracting with a statistical agent.--
                    (A) In general.--The Secretary shall contract with 
                a statistical agent via a competitive bidding process 
                to collect and review the data under this subsection 
                for accuracy and completeness.
                    (B) Office of financial research as the statistical 
                agent.--If the Secretary is unable to identify a 
                qualified statistical agent for collection of data 
                under this subsection, the Director of the Office of 
                Financial Research shall establish a data collection 
                infrastructure for collection of such data.

SEC. 3. GRANT PROGRAM TO PROMOTE LOSS PREVENTION INVESTMENTS.

    (a) In General.--The Secretary shall establish a grant program to 
provide grants to States to--
            (1) incentivize participating insurers, policyholders, and 
        State and local governments to provide funding for investments 
        in activities aimed at reducing losses to insurance providers; 
        and
            (2) encourage States to mandate that insurers offer an all-
        perils property insurance policy.
    (b) Amount of Grants.--When providing amounts to States under the 
grant program established under subsection (a), the Secretary shall--
            (1) solicit proposals from States describing the ways in 
        which States will use any amounts provided to improve the 
        availability and affordability of all-perils property insurance 
        policies through investments in loss mitigation and risk 
        management;
            (2) prioritize grants that yield the greatest return on 
        investment for loss prevention and risk mitigation which 
        benefit or target low and moderate income consumers and small 
        businesses; and
            (3) prioritize the awarding of grants to States with the 
        strongest building codes and which require property insurance 
        policies that provide coverage for the catastrophe perils 
        covered by the Program without excessively large deductibles as 
        determined by the Secretary.
    (c) Low and Moderate Income Consumers Defined.--In this section, 
the term ``low and moderate income consumers'' means a consumer with an 
income of less than 120 percent of the median household income for the 
community.
    (d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $50,000,000,000 in 2026;
            (2) $55,000,000,000 in 2027;
            (3) $60,000,000,000 in 2028;
            (4) $65,000,000,000 in 2029; and
            (5) $70,000,000,000 in 2030.

SEC. 4. REPORTS ON RELOCATION FUND AND EARTHQUAKE COVERAGE.

    The Secretary shall not later than--
            (1) 2 years after the date of the enactment of this Act, 
        submit to Congress a report on the feasibility of establishing 
        a fund to relocate homes and businesses that have become 
        uninsurable due to catastrophe perils; and
            (2) 3 years after the date of the enactment of this Act, 
        submit to Congress a report on the feasibility of including 
        earthquakes as a peril covered under the all-perils property 
        insurance policy.

SEC. 5. ASSISTANCE FOR LOW-INCOME CONSUMERS.

    (a) In General.--The Secretary shall, as amounts appropriated under 
this section allow, establish a grant program for States to provide 
financial assistance to low-income consumers for whom residential 
property insurance--
            (1) is required; and
            (2) represents a significant portion of the household 
        income of such consumers.
    (b) Application.--In applying for a grant under this section, a 
State shall demonstrate how the State will use grant amounts in the 
order of priority under subsection (c).
    (c) Order of Priority for Grant Amounts.--A State receiving grant 
amounts under this section shall prioritize the use of such amounts in 
the following manner:
            (1) The use of grant amounts for risk reduction as the 
        means to reduce the primary insurance premium for the consumer.
            (2) The use of grant amounts to relocate the homeowner from 
        an uninsurable property.
            (3) The use of grant amounts as cash assistance to pay a 
        portion of the insurance premium.
    (d) Consultation.--When establishing the grant program under 
subsection (a), the Secretary shall consult with the--
            (1) Secretary of Housing and Urban Development;
            (2) Director of the Federal Housing Finance Agency;
            (3) Secretary of Veterans Affairs;
            (4) Assistant Secretary for Housing and Federal Housing 
        Commissioner for the Federal Housing Administration; and
            (5) Secretary of Agriculture.
    (e) Report.--The Secretary shall, not later than 2 years after the 
date of the enactment of this section and each year thereafter, publish 
a report that analyzes which risk reduction investments under 
subsection (c)(1) are most cost-effective, broken down by State and by 
type of catastrophe peril.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary $50,000,000,000 annually to carry out 
this section.

SEC. 6. LONG-TERM POLICY PILOT PROGRAM.

    (a) In General.--The Secretary shall, in consultation with States 
and the National Association of Insurance Commissioners, establish a 
pilot program for all-perils property insurance policies with a policy 
term of at least 5 years (in this section referred to as a ``multi-year 
policy'').
    (b) Premium and Policy Conditions.--An insurer who participates in 
the pilot program established under this section may--
            (1) increase premiums based on--
                    (A) price indexes of construction costs;
                    (B) changes in home value; and
                    (C) optional coverages selected by the 
                policyholder;
            (2) not increase premiums based on a change in the 
        assessment by the insurer of the catastrophe peril risks 
        associated with the insured property;
            (3) require property maintenance consistent with the 
        condition of the property at time of initial policy issuance; 
        and
            (4) require loss mitigation investment partnerships as a 
        condition for the multi-year policy.
    (c) Actions by the Policyholder.--
            (1) Policy continuation.--With the agreement of the 
        insurer, a consumer purchasing the property during the term of 
        the multi-year policy may continue the policy for the remainder 
        of the term.
            (2) Election to new insurer.--If the policyholder elects to 
        move to a new insurer during the term of the multi-year policy, 
        the new insurer may pay the pro-rata share of the loss 
        mitigation investment for the policyholder.
            (3) Cancellation by policyholder.--If the policyholder is 
        the recipient of any funds for loss prevention property 
        improvements from the insurer, Federal, State, local 
        government, or other source and the policyholder cancels the 
        policy before the end of the multi-year policy term, the 
        policyholder shall return a pro-rata share of such improvement 
        to the source of the funds.

SEC. 7. DEFINITIONS.

    In this Act:
            (1) All-perils property insurance policy.--The term ``all-
        perils property insurance policy'' means a property insurance 
        policy approved by a State which includes coverage for 
        catastrophe perils as such perils are added to the Program.
            (2) Catastrophe peril.--The term ``catastrophe peril'' 
        means the damage caused by--
                    (A) wind, hurricane, wildfire, severe convective 
                storm, and flood as they are added to the Program under 
                section 2(d);
                    (B) earthquake, conditioned on the report under 
                section 4(2); and
                    (C) any other peril as determined by the Secretary 
                and added to the Program.
            (3) Engaged in the business of insurance.--The term 
        ``engaged in the business of insurance'' means a person or 
        entity that is subject to oversight by a State insurance 
        department.
            (4) Insurer.--The term ``insurer''--
                    (A) means an admitted or non-admitted insurance 
                company licensed or authorized to sell primary property 
                insurance by State insurance regulators; and
                    (B) does not include a reinsurance company or a 
                captive insurance company.
            (5) Participating insurer.--The term ``participating 
        insurer'' means an insurer that is participating in the 
        Program.
            (6) Property insurance policy.--The term ``property 
        insurance policy'' means a contract of insurance, through a 
        policy form approved by a State insurance department, that 
        provides, among other coverages, coverage for physical damage 
        to residential or commercial property.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (8) Statistical plan.--The term ``statistical plan'' 
        means--
                    (A) a description of the data elements to be 
                reported; and
                    (B) the instructions and procedures for accurately 
                reporting data.
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