[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.
                                 ______