[Congressional Record Volume 152, Number 67 (Thursday, May 25, 2006)]
[Senate]
[Pages S5233-S5235]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. NELSON of Florida:
S. 3114. A bill to establish a bipartisan commission on insurance
reform; to the Committee on Banking, Housing, and Urban Affairs.
Mr. NELSON of Florida. Mr. President, I ask unanimous consent that
the text of these four bills, the Commission on Catastrophic Disaster
Risk and Insurance Act of 2006, the Catastrophe Savings Accounts Act of
2006, the Policyholder Disaster Protection Act of 2006, and the
Homeowners Protection Act of 2006, be printed in the Record.
There being no objection, the text of the bills was ordered to be
printed in the Record, as follows:
S. 3114
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 ``Commission on Catastrophic
Disaster Risk and Insurance Act of 2006''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Hurricanes Katrina, Rita, and Wilma, which struck the
United States in 2005, caused over $200 billion in total
economic losses, including insured and uninsured losses.
(2) Although private sector insurance is currently
available to spread some catastrophe-related losses
throughout the Nation and internationally, most experts
believe there will be significant insurance and reinsurance
shortages, resulting in dramatic rate increases for consumers
and businesses, and the unavailability of catastrophe
insurance.
(3) The Federal Government has provided and will continue
to provide billions of dollars and resources to pay for
losses from catastrophes, including hurricanes, volcanic
eruptions, tsunamis, tornados, and other disasters, at huge
costs to American taxpayers.
(4) The Federal Government has a critical interest in
ensuring appropriate and fiscally responsible risk management
of catastrophes. Mortgages require reliable property
insurance, and the unavailability of reliable property
insurance would make most real estate transactions
impossible. In addition, the public health, safety, and
welfare demand that structures damaged or destroyed in a
catastrophe be reconstructed as soon as possible. Therefore,
the inability of the private sector insurance and reinsurance
markets to maintain sufficient capacity to enable Americans
to obtain property insurance coverage in the private sector
endangers the national economy and the public health, safety,
and welfare.
(5) Multiple proposals have been introduced in the United
States Congress over the past decade to address catastrophic
risk insurance, including the creation of a national
catastrophic reinsurance fund and the revision of the Federal
tax code to allow insurers to use tax-deferred catastrophe
funds, yet Congress has failed to act on any of these
proposals.
(6) To the extent the United States faces high risks from
catastrophe exposure, essential technical information on
financial structures and innovations in the catastrophe
insurance market is needed.
(7) The most efficient and effective approach to assessing
the catastrophe insurance problem in the public policy
context is to establish a bipartisan commission of experts to
study the management of catastrophic disaster risk, and to
require such commission to timely report its recommendations
to Congress so that Congress can quickly craft a solution to
protect the American people.
SEC. 3. ESTABLISHMENT.
There is established a bipartisan Commission on
Catastrophic Disaster Risk and Insurance (in this Act
referred to as the ``Commission'').
SEC. 4. MEMBERSHIP.
(a) Members.--The Commission shall be composed of the
following:
(1) The Director of the Federal Emergency Management Agency
or a designee of the Director.
(2) The Administrator of the National Oceanic and
Atmospheric Administration or a designee of the
Administrator.
(3) 12 additional members or their designees of whom one
shall be--
(A) a representative of a consumer group;
(B) a representative of a primary insurance company;
(C) a representative of a reinsurance company;
(D) an independent insurance agent with experience in
writing property and casualty insurance policies;
(E) a State insurance regulator;
(F) a State emergency operations official;
(G) a scientist;
(H) a faculty member of an accredited university with
experience in risk management;
(I) a member of nationally recognized think tank with
experience in risk management;
(J) a homebuilder with experience in structural
engineering;
(K) a mortgage lender; and
(L) a nationally recognized expert in antitrust law.
(b) Manner of Appointment.--
(1) In general.--Any member of the Commission described
under subsection (a)(3) shall be appointed only upon
unanimous agreement of--
(A) the majority leader of the Senate;
(B) the minority leader of the Senate;
(C) the Speaker of the House of Representatives; and
(D) the minority leader of the House of Representatives.
(2) Consultation.--In making any appointment under
paragraph (1), each individual described in paragraph (1)
shall consult with the President.
(c) Eligibility Limitation.--Except as provided in
subsection (a), no member or officer of the Congress, or
other member or officer of the Executive Branch of the United
States Government or any State government may be appointed to
be a member of the Commission.
(d) Period of Appointment.--
(1) In general.--Each member of the Commission shall be
appointed for the life 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 was made.
(e) Quorum.--
(1) Majority.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number 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 a quorum of the Commission.
(f) Chairperson.--The majority leader of the Senate, the
minority leader of the Senate, the Speaker of the House of
Representatives, and the minority leader of the House of
Representatives shall jointly select 1 member appointed
pursuant to subsection (a) to serve as the Chairperson of the
Commission.
(g) Meetings.--The Council shall meet at the call of its
Chairperson or a majority of its members at any time.
[[Page S5234]]
SEC. 5. DUTIES OF THE COMMISSION.
The Commission shall--
(1) assess--
(A) the condition of the property and casualty insurance
and reinsurance markets in the aftermath of Hurricanes
Katrina, Rita, and Wilma in 2005, and the 4 major hurricanes
that struck the United States in 2004; and
(B) the ongoing exposure of the United States to
earthquakes, volcanic eruptions, tsunamis, and floods; and
(2) recommend and report, as required under section 6, any
necessary legislative and regulatory changes that will--
(A) improve the domestic and international financial health
and competitiveness of such markets; and
(B) assure consumers of the--
(i) availability of adequate insurance coverage when an
insured event occurs; and
(ii) best possible range of insurance products at
competitive prices.
SEC. 6. REPORT.
(a) In General.--Not later than 90 days after the
appointment of Commission members under section 4, the
Commission shall submit to the President and the Congress a
final report containing a detailed statement of its findings,
together with any recommendations for legislation or
administrative action that the Commission considers
appropriate, in accordance with the requirements of section
5.
(b) Considerations.--In developing any recommendations
under subsection (a), the Commission shall consider--
(1) the catastrophic insurance and reinsurance market
structures and the relevant commercial practices in such
insurance industries in providing insurance protection to
different sectors of the American population;
(2) the constraints and opportunities in implementing a
catastrophic insurance system that can resolve key obstacles
currently impeding broader implementation of catastrophe risk
management and financing with insurance;
(3) methods to improve risk underwriting practices,
including--
(A) analysis of modalities of risk transfer for potential
financial losses;
(B) assessment of private securitization of insurances
risks;
(C) private-public partnerships to increase insurance
capacity in constrained markets; and
(D) the financial feasibility and sustainability of a
national catastrophe pool or regional catastrophe pools
designed to provide adequate insurance coverage and increased
underwriting capacity to insurers and reinsurers;
(4) approaches for implementing a public insurance scheme
for low-income communities, in order to promote risk
reduction and explicit insurance coverage in such
communities;
(5) methods to strengthen insurance regulatory requirements
and supervision of such requirements, including solvency for
catastrophic risk reserves;
(6) methods to promote public insurance policies linked to
programs for loss reduction in the uninsured sectors of the
American population;
(7) methods to strengthen the risk assessment and
enforcement of structural mitigation and vulnerability
reduction measures, such as zoning and building code
compliance;
(8) the appropriate role for the Federal Government in
stabilizing the property and casualty insurance and
reinsurance markets, with an analysis--
(A) of options such as--
(i) a reinsurance mechanism;
(ii) the modernization of Federal taxation policies; and
(iii) an ``insurance of last resort'' mechanism; and
(B) how to fund such options; and
(9) the merits of the 3 principle legislative proposals
currently pending in the 109th Congress, namely:
(A) The creation of a Federal catastrophe fund to act as a
backup to State catastrophe funds;
(B) Tax-deferred catastrophe accounts for insurers; and
(C) Tax-free catastrophe accounts for policyholders.
SEC. 7. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission or, at the direction of the
Commission, any subcommittee or member of the Commission,
may, for the purpose of carrying out this Act--
(1) hold such public hearings in such cities and countries,
sit and act at such times and places, take such testimony,
receive such evidence, and administer such oaths or
affirmations as the Commission or such subcommittee or member
considers advisable; and
(2) require, by subpoena or otherwise, the attendance and
testimony of such witnesses and the production of such books,
records, correspondence, memoranda, papers, documents, tapes,
and materials as the Commission or such subcommittee or
member considers advisable.
(b) Issuance and Enforcement of Subpoenas.--
(1) Issuance.--Subpoenas issued under subsection (a) shall
bear the signature of the Chairperson of the Commission and
shall be served by any person or class of persons designated
by the Chairperson for that purpose.
(2) Enforcement.--In the case of contumacy or failure to
obey a subpoena issued under subsection (a), the United
States district court for the judicial district in which the
subpoenaed person resides, is served, or may be found may
issue an order requiring such person to appear at any
designated place to testify or to produce documentary or
other evidence. Any failure to obey the order of the court
may be punished by the court as a contempt of that court.
(3) Confidentiality.--
(A) In general.--Information obtained under a subpoena
issued under subsection (a) which is deemed confidential, or
with reference to which a request for confidential treatment
is made by the person furnishing such information--
(i) shall be exempt from disclosure under section 552 of
title 5, United States Code; and
(ii) shall not be published or disclosed unless the
Commission determines that the withholding of such
information is contrary to the interest of the United States.
(B) Exception.--The requirements of subparagraph (A) shall
not apply to the publication or disclosure of any data
aggregated in a manner that ensures protection of the
identity of the person furnishing such data.
(c) 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.
(d) 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 the purposes of this Act.
(2) Procedure.--Upon request of the Chairperson of the
Commission, the head of that department or agency shall
furnish the information requested to the Commission.
(e) 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.
(f) 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.
(g) Gifts.--
(1) In general.--The Commission may accept, use, and
dispose of gifts or donations of services or property.
(2) Regulations.--The Commission shall adopt internal
regulations governing the receipt of gifts or donations of
services or property similar to those described in part 2601
of title 5, Code of Federal Regulations.
SEC. 8. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission
who is not an officer or employee of the Federal Government
shall be compensated at a rate equal to the daily equivalent
of the annual rate of basic pay prescribed for GS-18 of the
General Schedule under section 5332 of title 5, United States
Code, for each day (including travel time) during which such
member is engaged in the performance of the duties of the
Commission. All members of the Commission who are officers or
employees of the United States shall serve without
compensation in addition to that received for their services
as officers or employees of the United States.
(b) 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.
(c) Subcommittees.--The Commission may establish
subcommittees and appoint persons to such subcommittees as
the Commission considers appropriate.
(d) Staff.--Subject to such policies as the Commission may
prescribe, the Chairperson of the Commission may appoint and
fix the pay of such additional personnel as the Chairperson
considers appropriate to carry out the duties of the
Commission.
(e) Applicability of Certain Civil Service Laws.--
Subcommittee members and 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-18 of the General
Schedule under section 5332 of that title.
(f) 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-18 of the General
Schedule under section 5332 of that title.
(g) Detail of Government Employees.--Upon request of the
Chairperson of the Commission, 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
[[Page S5235]]
(2) such detail shall be without interruption or loss of
civil service status or privilege.
SEC. 9. TERMINATION.
The Commission shall terminate 60 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 $5,000,000 to carry
out the purposes of this Act.
Ms. LANDRIEU. Mr. President, one of the most frequent complaints I
have been hearing from people in Louisiana whose homes sustained damage
in Katrina and Rita has been about their property insurance. First, it
took insurance companies a long time to get adjusters into the area
after the storm and many people are still waiting for claim payments.
This was followed by the shock for many of our homeowners that their
property insurance policies covered wind damage, but not flood damage.
They could get the roof replaced, but the rest of the house was lost.
Many of them were not required to have flood insurance because they
either did not live in a flood plain or did not have a mortgage. And
now we are beginning to discover that many insurance companies are no
longer writing policies in Louisiana.
Our homeowners weathered one, and in some cases two, hurricanes
already. However, now it's as if our homeowners have been hit by
another hurricane--one causing a flood of red ink, lost homes, ruined
lives, and broken communities.
I hope we never see another storm like Katrina. I would not want any
of my colleagues' states to face the one-two punch of two hurricanes
the way Louisiana was. But hurricane season is coming again, starting
next week on June 1. These insurance issues and problems are going to
come again. We can rebuild levees and use the lessons of Katrina to
better prepare for these storms, but finding a solution to this
insurance issue is much harder.
First of all, insurance is regulated at the State level. We do not
control it up here. In all fairness, property casualty insurance
companies do not cover flood damage because that is covered by the
National Flood Insurance Program at FEMA. But the potential for
flooding from hurricanes still remains and our insurance system is not
ready to handle the amount of uninsured damage a massive storm like
Katrina.
I am pleased to join my colleague from Florida, Senator Nelson, as a
cosponsor of the Commission on Catastrophic Disaster Risk and Insurance
Act of 2006. This bill will not produce major changes in the insurance
industry overnight, but it will begin to take a look at this issue to
identify the best solution to ensuring that home and business owners
will have insurance coverage to help them rebuild after catastrophic
natural disasters.
The commission established by this legislation will take the first
steps for assessing the casualty insurance market and recommend any
necessary legislative changes to ensure that consumers will have
readily available and affordable insurance coverage to protect them
from natural disasters. Experts from a wide variety of fields in
disaster preparedness, construction engineering, the insurance
industry, and government will serve on the commission. While the
members will be chosen on a bipartisan basis, they will be taking a
nonpartisan approach to this subject.
I urge my colleagues to support this legislation. It is a first
step--a modest step--toward ensuring the financial security of
Americans in the face of catastrophic disasters.
______