[Congressional Record Volume 160, Number 112 (Thursday, July 17, 2014)]
[Senate]
[Pages S4574-S4595]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TERRORISM RISK INSURANCE PROGRAM REAUTHORIZATION ACT
The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to consideration of S. 2244, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (S. 2244) to extend the termination date of the
Terrorism Insurance Program established under the Terrorism
Risk Insurance Act of 2002, and for other purposes.
There being no objection, the Senate proceeded to consider the bill
(S. 2244) to extend the termination date of the Terrorism Insurance
Program established under the Terrorism Risk Insurance Act of 2002, and
for other purposes, which had been reported from the Committee on
Banking, Housing, and Urban Affairs, with amendments, as follows:
(The parts of the bill intended to be stricken are shown in boldface
brackets and the parts of the bill intended to be inserted are shown in
italic.)
S. 2244
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 ``Terrorism Risk Insurance
Program Reauthorization Act of 2014''.
SEC. 2. EXTENSION OF TERRORISM INSURANCE PROGRAM.
Section 108(a) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) is amended by striking ``December 31,
2014'' and inserting ``December 31, 2021''.
SEC. 3. FEDERAL SHARE.
Section 103(e)(1)(A) of the Terrorism Risk Insurance Act of
2002 (15 U.S.C. 6701 note) is amended by inserting ``and
beginning [in the calendar year that follows the date of
enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2014] on January 1, 2016, shall
decrease by [1 percent] 1 percentage point per calendar year
until equal to 80 percent'' after ``85 percent''.
SEC. 4. RECOUPMENT OF FEDERAL SHARE OF COMPENSATION UNDER THE
PROGRAM.
Section 103(e) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) is amended--
(1) in paragraph (6), in the matter preceding subparagraph
(A), by striking ``shall be'' and all that follows through
subparagraph (E) and inserting [``shall be $27,500,000,000
and beginning in the calendar year that follows the date of
enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2014 shall increase by $2,000,000,000
per calendar year until equal to $37,500,000,000.''; and]
``shall be the lesser of--
``(A) $27,500,000,000, as such amount is adjusted pursuant
to this paragraph; and
``(B) the aggregate amount, for all insurers, of insured
losses during such calendar year,
provided that beginning in the calendar year that follows the
date of enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2014, the amount set forth under
subparagraph (A) shall increase by $2,000,000,000 per
calendar year until equal to $37,500,000,000.'';
[[Page S4575]]
(2) in paragraph (7)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i), by striking ``for
each of the periods referred to in subparagraphs (A) through
(E) of paragraph 6 (6)''; and
(ii) in clause (i), by striking ``for such period'';
[(B) in subparagraph (B)--
(i) by striking ``for any period referred to in any of
subparagraphs (A) through (E) of paragraph (6)''; and
(ii) by striking ``for such period'';]
(B) by striking subparagraph (B) and inserting the
following:
``(B) [Reserved.]'';
[(C) in subparagraph (C), by striking ``occurring during
any of the periods referred to in any of subparagraphs (A)
through (E) of paragraph (6)''; and]
(C) in subparagraph (C)--
(i) by striking ``occurring during any of the periods
referred to in any of subparagraphs (A) through (E) of
paragraph (6), terrorism loss risk-spreading premiums in an
amount equal to 133 percent'' and inserting ``, terrorism
loss risk-spreading premiums in an amount equal to 135.5
percent''; and
(ii) by inserting ``as calculated under subparagraph (A)''
after ``mandatory recoupment amount''; and
(D) in subparagraph (E)(i)--
(i) in subclause (I)--
(I) by striking ``2010'' and inserting ``2017''; and
(II) by striking ``2012'' and inserting ``2019'';
(ii) in subclause (II)--
(I) by striking ``2011'' and inserting ``2018'';
(II) by striking ``2012'' and inserting ``2019''; and
(III) by striking ``2017'' and inserting ``2024''; and
(iii) in subclause (III)--
(I) by striking ``2012'' and inserting ``2019''; and
(II) by striking ``2017'' and inserting ``2024''.
SEC. 5. TECHNICAL AMENDMENTS.
The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) is amended--
(1) in section 102--
(A) in paragraph (3)--
(i) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively;
(ii) in the matter preceding clause (i) (as so
redesignated), by striking ``An entity has'' and inserting
the following:
``(A) In general.--An entity has''; and
(iii) by adding at the end the following new subparagraph:
``(B) Rule of construction.--An entity, including any
affiliate thereof, does not have `control' over another
entity, if, as of the date of enactment of the Terrorism Risk
Insurance Program Reauthorization Act of 2014, the entity is
acting as an attorney-in-fact, as defined by the Secretary,
for the other entity and such other entity is a reciprocal
insurer, provided that the entity is not, for reasons other
than the attorney-in-fact relationship, defined as having
`control' under subparagraph (A).'';
([A]B) in paragraph (7)--
(i) by striking subparagraphs (A) through (F) and inserting
the following:
``(A) the value of an insurer's direct earned premiums
during the immediately preceding calendar year, multiplied by
20 percent; and'';
(ii) by redesignating subparagraph (G) as subparagraph (B);
and
(iii) in subparagraph (B), as so redesignated by clause
(ii)--
(I) by striking ``notwithstanding subparagraphs (A) through
(F), for the Transition Period or any Program Year'' and
inserting ``notwithstanding subparagraph (A), for any
calendar year''; and
(II) by striking ``Period or Program Year'' and inserting
``calendar year'';
([B]C) by striking paragraph (11); and
([C]D) by redesignating paragraphs (12) through (16) as
paragraphs (11) through (15), respectively; and
(2) in section 103--
(A) in subsection (c), by striking ``Program Year'' and
inserting ``calendar year'';
(B) in subsection (e)--
(i) in paragraph (1)--
(I) in subparagraph (A), as previously amended by section
3--
(aa) by striking ``the Transition Period and each Program
Year through Program Year 4 shall be equal to 90 percent, and
during Program Year 5 and each Program Year thereafter'' and
inserting ``each calendar year'';
(bb) by striking the comma after ``80 percent''; and
(cc) by striking ``such Transition Period or such Program
Year'' and inserting ``such calendar year''; and
(II) in subparagraph (B), by striking ``exceed'' and all
that follows through clause (ii) and inserting ``exceed
$100,000,000 with respect to such insured losses occurring in
the calendar year.'';
(ii) in paragraph (2)(A), by striking ``the period
beginning on the first day of the Transition Period and
ending on the last day of Program Year 1, or during any
Program Year thereafter'' and inserting ``a calendar year'';
and
(iii) in paragraph (3), by striking ``the period beginning
on the first day of the Transition Period and ending on the
last day of Program Year 1, or during any other Program
Year'' and inserting ``any calendar year''; and
(C) in subsection (g)(2)--
(i) by striking ``the Transition Period or a Program Year''
each place that term appears and inserting ``the calendar
year'';
(ii) by striking ``such period'' and inserting ``the
calendar year''; and
(iii) by striking ``that period'' and inserting ``the
calendar year''.
SEC. 6. IMPROVING THE CERTIFICATION PROCESS.
(a) Definitions.--As used in this section--
(1) the term ``act of terrorism'' has the same meaning as
in section 102(1) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note);
(2) the term ``certification process'' means the process by
which the Secretary determines whether to certify an act as
an act of terrorism under section 102(1) of the Terrorism
Risk Insurance Act of 2002 (15 U.S.C. 6701 note); and
(3) the term ``Secretary'' means the Secretary of the
Treasury.
(b) Study.--Not later than 9 months after the date of
enactment of this Act, the Secretary shall conduct and
complete a study on the certification process.
(c) Required Content.--The study required under subsection
(a) shall include an examination and analysis of--
(1) the establishment of a reasonable timeline by which the
Secretary must make an accurate determination on whether to
certify an act as an act of terrorism;
(2) the impact that the length of any timeline proposed to
be established under paragraph (1) may have on the insurance
industry, policyholders, consumers, and taxpayers as a whole;
(3) the factors the Secretary would evaluate and monitor
during the certification process, including the ability of
the Secretary to obtain the required information regarding
the amount of projected and incurred losses resulting from an
act which the Secretary would need in determining whether to
certify the act as an act of terrorism;
(4) the appropriateness, efficiency, and effectiveness of
the consultation process required under section 102(1)(A) of
the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) and any recommendations on changes to the consultation
process; and
(5) the ability of the Secretary to provide guidance and
updates to the public regarding any act that may reasonably
be certified as an act of terrorism.
(d) Report.--Upon completion of the study required under
subsection (a), the Secretary shall submit a report on the
results of such study to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(e) Rulemaking.--Section 102(1) of the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) by redesignating subparagraph (D) as subparagraph (E);
and
(2) by inserting after subparagraph (C) the following:
``(D) Timing of certification.--Not later than 9 months
after the report required under section 6 of the Terrorism
Risk Insurance Program Reauthorization Act of 2014 is
submitted to the appropriate committees of Congress, the
Secretary shall issue final rules governing the certification
process, including any timeline applicable to any
certification by the Secretary on whether an act is an act of
terrorism under this paragraph.''.
SEC. 7. GAO STUDY ON UPFRONT PREMIUMS.
(a) Study.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General of the United
States shall complete a study on the viability and effects of
the Federal Government assessing and collecting upfront
premiums on insurers that participate in the Terrorism
Insurance Program established under the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) (hereafter in
this section referred to as the ``Program'').
(b) Required Content.--The study required under subsection
(a) shall examine, but shall not be limited to, the following
issues:
(1) How the Federal Government could determine the price of
such upfront premiums on insurers that participate in the
Program.
(2) How the Federal Government could collect and manage
such upfront premiums.
(3) How the Federal Government could ensure that such
upfront premiums are not spent for purposes other than claims
through the Program.
(4) How the assessment and collection of such upfront
premiums could affect take-up rates for terrorism risk
coverage in different regions and industries and how it could
impact small businesses and consumers in both metropolitan
and non-metropolitan areas.
(5) The effect of collecting such upfront premiums on
insurers both large and small.
(6) The effect of collecting such upfront premiums on the
private market for terrorism risk reinsurance.
(7) The size of any Federal Government subsidy insurers may
receive through their participation in the Program, taking
into account the Program's current post-event recoupment
structure.
(c) Report.--Upon completion of the study required under
subsection (a), the Comptroller General shall submit a report
on the results of such study to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(d) Public Availability.--The study and report required
under this section shall be made available to the public in
electronic form and shall be published on the website of the
Government Accountability Office.
The PRESIDING OFFICER. Under the previous order, the committee-
reported amendments are agreed to, and the bill, as amended, is
considered as original text for purposes of further amendment.
The PRESIDING OFFICER. The Senator from Florida.
[[Page S4576]]
Mr. NELSON. I ask to speak for 3 minutes as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. Nelson are printed in today's Record under
``Morning Business.'')
The PRESIDING OFFICER. The Senator from New York.
Mr. SCHUMER. First, I thank my good friend from Florida for his
heartfelt and his always articulate words. We are now going to debate,
finally, the reauthorization of the Terrorism Risk Insurance Program.
Senator Crapo and I have opening statements, but Senator Tester, who
has added an extremely important amendment to this legislation, has a
markup shortly, so we are going to accede and let him speak about his
amendment first, and then we will get on with our opening statements. I
thank Senator Tester for his hard work on this issue as well as his
ability to compromise to get something done.
The PRESIDING OFFICER. The Senator from Montana.
Amendment No. 3552
Mr. TESTER. I call up amendment No. 3552, ask for its immediate
consideration, and I ask that Senator Klobuchar and Senator Pryor be
added as cosponsors.
=========================== NOTE ===========================
On page S4576, July 17, 2014, in the first column, the Record
reads: AMENDMENT NO. 3552 Mr. REID. I call up amendment No. . . ..
The online Record has been corrected to read: AMENDMENT NO. 3552
Mr. TESTER. I call up amendment No. . . ..
========================= END NOTE =========================
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report the amendment.
The assistant legislative clerk read as follows:
The Senator from Montana [Mr. Tester] for himself, Ms.
Klobuchar and Mr. Pryor, proposes an amendment numbered 3552.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. TESTER. I thank Chairman Johnson and Ranking Member Crapo and
Senators Schumer and Heller for their hard work on helping me on the
TRIA bill and for helping me on this amendment, as well as Senator
Schumer and Senator Heller for their hard work not only on the TRIA
legislation but also on the NARAB amendment, which I am going to talk
about in a moment. I also wish to give a special thank-you to Senator
Johanns, who is a cosponsor on this amendment and somebody with whom I
have worked very closely to get this amendment to the point it is
today.
The Tester-Johanns amendment is the National Association of
Registered Agents and Brokers Act, otherwise known as NARAB. NARAB is a
bill Senator Johanns and I introduced last year. It was reported out of
the Banking, Housing, and Urban Affairs Committee on a voice vote.
Our amendment creates a nonprofit association to provide one-stop
licensing for insurance agents and brokers operating outside of their
home State. This arrangement would fully preserve the authority of
State insurance regulators to supervise these markets.
Currently, an insurance agent or broker seeking to operate in
multiple States must meet different State-specific licensing
requirements and seek approval from each State's insurance
commissioner. This process is time consuming, it is costly, it is
redundant, and it is sometimes contradictory--without providing any
greater consumer protection. That is a big disincentive for smaller
agents and brokers to grow their businesses.
This is not a new issue for the insurance industry. Congress
recognized the need for a forum to reform the insurance licensing
system in 1999 when it incorporated the National Association of
Registered Agents and Brokers Act subtitle into the Gramm-Leach-Bliley
Act. Unfortunately, at that time Congress did not immediately establish
NARAB. As a result, Gramm-Leach-Bliley did not achieve the level of
reciprocity and uniformity Congress expected and these efforts to
streamline cross-state insurance licensing never took hold. That is why
this important amendment is before the Senate today.
Senator Johanns' and my amendment would provide insurance agents and
brokers with the option of becoming a member of NARAB provided that
they meet the professional standards set by the association and undergo
a criminal background check.
NARAB will streamline the licensing process for agents and brokers,
enabling them to be licensed under one single, strong national
licensing standard rather than following different State standards,
thereby saving time and money.
In addition to setting rigorous professional standards, the
association will let agents and brokers renew their licenses all at
once and fully preserve the abilities of regulators to protect
consumers and supervise and discipline agents and brokers.
Currently, on average, insurance agents sell their products in eight
States, with many serving even more. A one-stop licensing compliance
mechanism will benefit all agents and brokers but particularly the
smaller folks who must spend time and money dealing with different
standards in different States.
A one-stop shop for insurance licensing will help smaller players
compete against the bigger competitors. That is good for business, and
it is good for consumers.
NARAB represents a decade of effort, and I am pleased we will finally
achieve the goals laid out in Gramm-Leach-Bliley. Some feared NARAB
would diminish States rights. As a former State legislator, when folks
start talking about States rights issues, I pay attention, but in this
case I believe they are wrong.
I wish to take a minute and talk about how this amendment protects
States rights. Under this amendment, States would retain all authority
to license their own resident agents and brokers. The association would
be required to notify States when agents and brokers apply for
membership, letting the States notify NARAB of any reason membership
should not be granted to the producer.
States will also have significant control over NARAB. The nonprofit
association would be governed by a board of directors dominated by
State insurance regulators and chaired by a State insurance regulator.
Most importantly, NARAB deals only with marketplace entry and would not
impact the day-to-day regulation of insurance. States will maintain
exclusive control of the regulation of marketplace activities, consumer
protection requirements, unfair trade practices, and other important
areas.
Under this bill, under this amendment, we will preserve the authority
of States to supervise insurance producers. Any agent or broker who
obtains the authority to operate in a jurisdiction through NARAB is
still subject to the full regulatory authority of that State and must
comply with all marketplace requirements. Under our amendment, States
will continue to receive insurance licensing fees, which will be
collected by NARAB and remitted to the States.
This legislation is supported by the National Association of
Insurance and Financial Advisers, the Council of Insurance Agents and
Brokers, and the Independent Insurance Agents and Brokers of America.
It is also supported by the National Association of Insurance
Commissioners, which has expressed its full support for this bill and
the final TRIA bill.
I urge my colleagues to support the Tester-Johanns amendment. It is
truly a commonsense amendment that helps not only the industry but also
the consumers.
I yield the floor.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. JOHANNS. Mr. President, I will begin today by acknowledging the
good work of the good Senator from Montana. This bill has been around
for a long time, and it is our hope that we will get to a point today
where we can say that finally we have solved the problems.
The Senator from Montana has done an excellent job of laying out what
this bill is all about and what it is not about, and I don't feel a
need today to repeat what he has said, but let me just make a couple of
points.
First, the partnership we had in working on this bill was excellent,
and that is why it is this far along. It was a bipartisan effort.
This legislation is long overdue, and it does benefit consumers and
businesses all across this great country. It is exactly what we look
for. It reduces redtape, it encourages competition and protects State
law, and it promotes consumer choice. For these reasons, it is my hope
the entire Senate unanimously supports the amendment.
I might mention that we passed this legislation out of the banking
committee about a year ago. That was after working on this for about 10
[[Page S4577]]
years. The House passed this bill last year by an overwhelming
bipartisan vote, 397 to 6. So I am pleased we can advance this
legislation today as part of the terrorism risk insurance bill, which I
also support and will vote yes on.
Frankly, it is refreshing to finally be allowed to vote on amendments
on the Senate floor. I hope this is a sign of things to come. I thank
Senator Schumer and Senator Crapo for their work in bringing us to this
point. Without their work, TRIA would not be where it is today.
I urge the adoption of the amendment. I hope we can move the
legislation to the President's desk as soon as possible.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from New York.
Mr. SCHUMER. Mr. President, I thank my colleagues from Montana and
Nebraska for their hard work on not only this legislation but their
very important amendment--long overdue. I certainly thank Senators
Johnson and Crapo, without whose leadership we couldn't be here to pass
this bill. I thank my original cosponsors, Senator Kirk from Illinois
who is here, Senator Jack Reed, Senator Heller, Senator Murphy, Senator
Johanns, Senator Warner, Senator Blunt, and Senator Menendez, all of
whom recognized the importance of having this incredibly important
program reauthorized.
As author of the original TRIA legislation, I have watched this
evolution closely. I could not be more convinced of the necessity to
reauthorize the program for the long haul.
I remember the dark days right after 9/11. I was there. The worst
thing was the loss of life--people we had all known. I know people who
were lost--a guy I played basketball with in high school, a businessman
who helped me on the way up, a firefighter with whom I did blood
drives. But there was also the economic worry. People thought southern
Manhattan would not come back. People thought businesses would flee New
York--that New York's greatest days were behind us. And of course the
people of New York, with their resiliency, backed up by everyone in
this country--including President Bush, very strongly--did come back.
But the uncertainty we faced in the immediate aftermath was that there
would be no building in southern Manhattan or Manhattan at all. And we
have some history.
One of the things that greatly stood in the way was the private
sector did not offer any sufficient coverage to protect against the
threat of terrorism. No one knew when there might be another terrorist
incident. Insurance companies, knowing how large the losses were,
figured it was better not to underwrite insurance than write it for
such an astronomical sum that the building would not be even
economically feasible.
We have some colleagues who said this should be a private sector
endeavor. Well, we have history. The private sector was unable, because
of the potential economic losses if, God forbid, there was another
terrorist attack, whether it be conventional, nuclear, or chemical, to
provide terrorism insurance. When that occurs, banks would not finance
buildings, knowing there was no insurance backup, and we would have
been in huge trouble. That is why we devised the terrorism insurance
bill.
For those who say let the private sector do it, we have an
experiment. We have what the scientists would call a controlled
experiment. When there was no terrorism insurance after 9/11, the
private sector would not offer insurance. We even find to this day, as
the existing bill expires, fewer people underwrite terrorism insurance
and fewer buildings are financed.
So we can do one of two things: We can sit back and let the market
handle this on its own and lose millions--literally millions--of jobs,
lose economic stability, safety, prosperity, and growth or we can renew
this legislation. We can come up with a smart, responsible, risk-
sharing system where the private sector is paying upfront. But if, God
forbid, there is another serious incident beyond the capability of the
private sector to shoulder, the Federal Government can step in and
provide a backstop. That is what we have done.
The TRIA Program is a shining example of the government partnering
with the private sector to solve problems that neither can solve on its
own.
Let me underline, first, the importance to my city of New York. The
redevelopment of downtown Manhattan is booming there. People are
flocking to live there and work there. It is the hot area of New York
again--not just with financial services but with law and advertising
and high-tech. It serves as a reminder of the role the Federal
Government can and should play in helping facilitate the stability and
growth of cities across the country.
This bill will not lessen the impact of a terrorist attack but will
help ensure that our cities throughout the country are less vulnerable
to the economic devastation that would follow such a horrific event.
But this bill is hardly just focused on New York City. It not only
affects every large city--my good friend from Nebraska spoke--it
affects the football stadium and any renovations that might occur there
in Lincoln. I have been there for a Nebraska-Oklahoma game. It was an
amazing experience. It affects any city that has large gatherings of
people and buildings--shopping centers, athletic facilities, colleges.
So it affects almost every State. That is one of the reasons we have
come together and gotten such broad bipartisan support.
We must make sure that every reauthorization of the program provides
the certainty lenders and developers need to make the kind of long-term
investment our country and large projects need to stimulate job growth
and economic growth, and this bill does just that. That is why it was
passed out of the banking committee unanimously.
Again, I thank my colleagues, particularly on the other side of the
aisle. As Senator Johanns said--and we say it on each bill where there
is some bipartisan support--this one has overwhelming support. Maybe
this bill can be a model that at least on many issues we can work
together.
Time is of the essence. Insurance policies for 2015 are already being
written. Each day that goes by without a TRIA Program causes great
uncertainty in the market and holds back the potential for more
development, more construction, more jobs, and more economic growth.
I will talk about the amendments later, but I urge my colleagues,
both here in the Senate and in the House, to move as quickly as
possible because our economy is greatly affected by it. It is one of
those that ``runs quiet, runs deep.'' It is a quiet policy but a policy
that greatly affects lots of things that go on.
Again, I thank my colleagues, Senator Crapo for his good and hard
work, as well as Senator Johnson and my cosponsors.
I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAPO. Mr. President, I am appreciative of Senator Schumer and
the work we have been able to do together to move this legislation
forward.
I rise today to speak in favor of S. 2244, the Terrorism Risk
Insurance Act, or TRIA, program. As a cosponsor of this bill, I
recognize Senator Schumer, Senator Kirk, Senator Heller, Senator Reed,
and others for helping to put this bipartisan piece of legislation
together.
Chairman Johnson and his staff also deserve a great amount of thanks
for their strong efforts in moving this bill forward.
Working together, we developed a balanced bipartisan product that was
literally unanimously supported in the banking committee 22 to 0. This
bill we have put together allows the private insurance industry to
absorb and cover the losses of all but the largest acts of terror--ones
in which the Federal Government would likely be forced to step in, in
any event, if the program were not there. Taxpayer protections have
been increased in this reauthorization by moving more of the
responsibility for losses on to private insurers.
For those who are not familiar with the program, TRIA was initially
passed as a response to the unavailability of terrorism insurance in
the wake of 9/11. The private market had already retreated in response
to those terrorist attacks. It was then thought that a temporary
program would allow the market time to develop products that would
allow policyholders to protect themselves from terrorism losses.
More than a decade after the tragic events of 9/11, the temporary
inability
[[Page S4578]]
to insure against terrorism has abated, and private capital is better
positioned to take on more exposure to terrorism.
When the banking committee held its first hearing on TRIA's
reauthorization last year, we discussed the ability of the private
insurance market to step in to provide terrorism insurance if the TRIA
Program expired. In that hearing, and in subsequent meetings with
providers, policyholders, and stakeholders, we recognized on a
bipartisan basis the continued difficulties associated with providing
terrorism insurance required that we look again at extending the act.
Terrorism is difficult to predict. Therefore, the ability to develop
products to insure against terrorism is very difficult to do. The size,
severity, and frequency of attacks are hard to model. Also, attacks may
be highly correlated, making it difficult for private insurers to
diversify their risks.
Having TRIA in place was determined to be important. But if the
market is too heavily reliant on Federal support, we may deter private
companies from coming up with cost-effective solutions. That is why,
instead of a straight reauthorization, I and others pushed for reforms
to maintain the program and increase protections for taxpayers.
In order to do that, we examined each of the policy levers in the
program. The bill marked up by the banking committee would increase the
insurance industry's aggregate retention level and the company
coinsurance levels. As the program stands today, the Federal Government
would recoup any TRIA payments it makes up to $27.5 billion through
post-event payments. This industry retention level allows the taxpayer
to recover TRIA payments through an industrywide assessment on
property-casualty policies. This aspect of the bill was last changed in
the 2005 reauthorization. The bill before us today increases that
recoupment level by $2 billion a year, to an overall level of $37.5
billion--an additional $10 billion. This is a significant reduction in
the potential exposure and cost to taxpayers.
In addition, the bill increases the company coinsurance level from 15
percent to 20 percent over 5 years. This means that before the backstop
is reached, each company will take on a greater portion of the losses
above their deductible.
In order to get more private capital in the marketplace, Senator
Flake has an amendment to create an advisory committee to promote the
creation and development of private sector risk-sharing mechanisms. I
support the addition of the Flake amendment and believe the advisory
committee will find private sector solutions that will allow us to
further decrease the program in future reauthorizations.
Before I conclude, I have a handful of letters in my possession here
from groups across the country strongly supporting and encouraging that
we adopt this legislation.
The U.S. Chamber of Commerce has listed this as a key vote. The
Coalition to Insure Against Terrorism, which represents dozens and
dozens of the financial sector interests across this country,
recommends and encourages that we support this legislation, and the
Mortgage Bankers Association, the National Association of Insurance
Companies, the Property Casualty Insurers, the National Apartment
Association, the National Multifamily Housing Council, and the American
Builders Conference.
These are just a sampling of letters we have received from interests
across the Nation that support this legislation. I ask unanimous
consent that these letters be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Associated Builders
and Contractors, Inc.,
Washington, DC, July 17, 2014.
U.S. Senate,
Washington, DC.
Dear Senator: on behalf of Associated Builders and
Contractors (ABC), a national construction industry
association with 70 chapters representing nearly 21,000
members, I am writing to express our support for S. 2244, the
Terrorism Risk Insurance Program Reauthorization Act of 2014.
The bill, introduced by Sen. Chuck Schumer (D-N.Y.), would
extend the Terrorism Risk Insurance Act (TRIA) for seven
years beyond the current expiration date of December 14,
2014, ensuring the construction industry will be able to
secure sufficient terrorism insurance.
Following the tragic attacks on our country on September
11, 2001, terrorism insurance rates skyrocketed and many
contractors were unable to secure insurance, forcing projects
to be put on hold, costing jobs and hindering economic
development. The attacks had a particularly devastating
impact on the construction industry: more than one million
jobs were lost and $15 billion in real estate transactions
were canceled.
In 2002, President Bush signed TRIA into law, immediately
providing much needed assurance to builders and lenders. TRIA
acted as a spark to help our economy recover in the face of
continued terrorist threats by allowing contractors across
the country to secure this commercially necessary product.
Since 2002, TRIA has been reauthorized twice in
overwhelmingly bipartisan fashion and has continued to act as
a public-private partnership to ensure the stability of the
terrorism insurance marketplace. The seven year extension
contained in S. 2244 would provide a long term backstop that
is necessary to ensure the construction industry's future
success. Without the extension, banks will be less inclined
to lend necessary funds to new construction projects and
companies may be forced out of the industry because of
financial risks, costing jobs and putting a roadblock in our
nation's drive to economic recovery.
In the wake of a recession in which our industry faced a
27.2 percent unemployment rate, the construction economy
cannot sustain the uncertainty and disruption that the
expiration of TRIA would trigger.
ABC and its members fully support the extension of TRIA,
and urges all Senators to support S. 2244.
Sincerely,
Geoffrey Burr,
Vice President, Government Affairs.
____
National Multifamily Housing Council, National Apartment
Association,
Washington, DC, July 16, 2014.
Dear Senator: This week the U.S. Senate is scheduled to
consider a bill to reauthorize the Terrorism Risk Insurance
Act (TRIA). We commend Chairman Johnson and Ranking Member
Crapo for their good work on S. 2244, the Terrorism Risk
Insurance Reauthorization Act of 2014. It represents a
bipartisan, balanced approach to maintaining the necessary
program elements of TRIA while enhancing taxpayer
protections. TRIA was first enacted after the events of 9-11
creating a federal backstop so that affordable terrorism
coverage would be available and affordable for commercial
policyholders across the country, including apartment
property owners, developers and managers. The program has
been a successful public/private partnership and is fiscally
sound.
On behalf of the National Multifamily Housing Council
(NMHC) and the National Apartment Association (NAA), we urge
your support of S. 2244. As policyholders, our members are
anxious to advance legislation in a swift manner to eliminate
the uncertainty associated with the year-end program
expiration.
NMHC/NAA represent the nation's leading firms participating
in the multifamily rental housing industry. Our combined
memberships engage in all aspects of the apartment industry,
including ownership, development, management and finance.
NMHC represents the principal officers of the apartment
industry's largest and most prominent firms. NAA is a
federation of 170 state and local apartment associations
comprised of approximately 64,000 multifamily housing
companies representing nearly 7.5 million apartment homes
throughout the United States and Canada.
TRIA and subsequent extensions of the program have been the
mechanism that provides ready access to affordable insurance
coverage. Terrorism risk does not resemble other commercial
risks. Unlike natural disasters in which insurers have had
significant experiences and data to project the risk of
damage, terrorism remains unpredictable and therefore largely
uninsurable. The impact of an event can be enormous, and
insurance modeling for such risks is still not reliable, thus
underscoring the importance of continued federal involvement.
In 2012 data collected from our members relative to their
cost of insurance, take up rates for terrorism coverage was
91%. This is not insignificant and demonstrates that
certainty offered by TRIA in costs and coverage limits are
critical components in a multifamily property owner's
continued ability to offer safe and affordable housing.
We thank you for your support of this measure and
appreciate your taking steps to move this important
legislation one step closer to enactment before the December
2014 expiration.
Sincerely,
Douglas M. Bibby, President,
National Multi Housing Council.
Douglas S. Culkin, CAE, President,
National Apartment Association.
[[Page S4579]]
____
Property Casualty Insurers
Association of America,
July 16, 2014.
Contact: Eileen Gilligan
Phone: 202-639-0497
Email: Eileen.G[email protected]
PCI Urges the Senate To Support the Terrorism Risk Insurance Program
Reauthorization Act of 2014
Washington--Nat Wienecke, senior vice president, federal
government relations of the Property Casualty Insurers
Association of America (PCI) issued the following statement
in regards to the Senate's upcoming consideration of S. 2244,
the Terrorism Risk Insurance Program Reauthorization Act of
2014.
``PCI strongly supports passage of S. 2244, the Terrorism
Risk Insurance Program Reauthorization Act of 2014, and
commends the Senate Committee on Banking, Housing, and Urban
Affairs for unanimously passing this legislation and sending
it to the full Senate for a vote,'' said Wienecke. ``TRIA is
a critical part of the fabric of our national response plan
for terrorist attacks. Ensuring America's economic resiliency
to terrorist attacks is a solemn responsibility and we call
on the members of the Senate to vote aye and move this
legislation one step closer to the president's desk.''
PCI is composed of more than 1,000 member companies,
representing the broadest cross-section of insurers of any
national trade association. PCI members write over $195
billion in annual premium, 39 percent of the nation's
property casualty insurance. Member companies write 46
percent of the U.S. automobile insurance market, 32 percent
of the homeowners market, 37 percent of the commercial
property and liability market, and 41 percent of the private
workers compensation market.
____
National Association
of Mutual Insurance Companies,
July 16, 2014.
Dear Senator: as the Senate completes floor consideration
of S. 2244, the Terrorism Risk Insurance Program
Reauthorization Act of 2014, the National Association of
Mutual Insurance Companies respectfully urges you to vote
``yes'' on this critical piece of legislation. A long-term
reauthorization of the TRIA program ensures a vital piece of
the nation's economic national security infrastructure will
continue to encourage private sector involvement in the
terrorism insurance marketplace--thereby protecting and
promoting our nation's finances, security, and economic
strength.
NAMIC is the largest and most diverse property/casualty
trade association in the country, with 1,400 regional and
local mutual insurance member companies on main streets
across America joining many of the country's largest national
insurers who also call NAMIC their home. Member companies
serve more than 135 million auto, home and business
policyholders, writing in excess of $196 billion in annual
premiums that account for 50 percent of the automobile/
homeowners market and 31 percent of the business insurance
market. More than 200,000 people are employed by NAMIC member
companies.
NAMIC appreciates the bipartisan leadership of the Senate
Banking Committee in reporting legislation by a unanimous
vote which both increases taxpayer protections and which will
maintain a robust terrorism insurance market for consumers
and companies of all sizes. In particular, we applaud the
crafters of S. 2244 for recognizing that raising the
``trigger level'' could make it impossible for many small to
medium-sized insurers to continue to write terrorism and
other business coverages without ultimately doing anything to
reduce taxpayer exposure.
As it is, we are encouraging you to pass this compromise
legislation to reauthorize a program that has protected the
economic security of the United States since its creation
following the September 11, 2001 terrorist attacks.
Sincerely,
James D. Grande,
SVP--Federal and Political Affairs, National Association of
Mutual Insurance Companies.
____
Mortgage Bankers Association,
July 14, 2014.
Hon. Harry Reid,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. Mitch McConnell,
Minority Leader, U.S. Senate,
Washington, DC.
Dear Leader Reid and Leader McConnell: On behalf of the
Mortgage Bankers Association (MBA), I am writing to urge the
Senate to pass S. 2244, the Terrorism Risk Insurance Program
Reauthorization Act of 2014, which was unanimously approved
by the Senate Banking Committee last month. With the year-end
expiration of the Terrorism Risk Insurance Act (TRIA) looming
closer, it is critical that Congress take action to pass a
long-term extension of the terrorism risk insurance program.
MBA's paramount objective for TRIA reauthorization is for
terrorism risk insurance to remain both available and
affordable, in the long-term, for commercial real estate and
multifamily properties. The clearest path to this objective
is a long-term TRIA extension without modifications. If
changes to the program are inevitable, our perspective on
TRIA reauthorization legislation is then guided by its
potential impact on the availability and affordability of
terrorism risk insurance. By introducing a limited number of
incremental programmatic modifications, S. 2244 is consistent
with past reauthorization efforts that MBA has supported.
A long-term extension of TRIA is essential to the health
and vitality of the $2.5 trillion commercial and multifamily
real estate finance sector and the nation as a whole. The
absence of available and affordable terrorism risk insurance
would not only impact the commercial real estate finance
center, but would ripple through the economy as buildings
became more difficult and costly to finance and purchase.
Any changes to TRIA should be incremental, at most, and
implemented over the course of a long-term reauthorization
period in order to avoid unintended consequences. Past
reauthorization efforts for the program have introduced
gradual changes that did not negatively impact the
availability and affordability of terrorism risk insurance. A
departure from this approach could result in price and
availability shocks for terrorism risk insurance. We are
pleased the Senate is placing a high priority on TRIA
reauthorization.
Regarding S. 2244, MBA offers the following observations:
Long-Term Extension--MBA strongly supports the seven-year
extension period because it will allow for extended market
certainty that a terrorism risk insurance program will be in
place.
Increased Recoupment--The federal government's potential
recoupment is increased from $27.5 billion to $37.5 billion
over a five-year period. The five-year adjustment period ($2
billion per year) represents an incremental approach to an
important element of the program.
Increased Insurance Company Co-Pay--After the initial
deductible, the insurance company co-pay will be increased by
one percent a year for five years until the co-pay increases
from 15 percent to 20 percent. This also represents an
incremental change to another important element of the
program. TRIA reauthorization should take into consideration
the potential impacts on small property insurance companies.
MBA urges all members of the Senate to vote in favor of S.
2244 and to oppose amendments that would weaken the TRIA
program. We look forward to working with Congress, other
policymakers, and engaged stakeholders to ensure the long-
term reauthorization of the TRIA program as quickly as
possible.
Sincerely,
David H. Stevens,
President and Chief Executive Officer.
____
Coalition To Insure
Against Terrorism,
Washington, DC, July 16, 2014.
Dear Senator: The Coalition to Insure Against Terrorism
(CIAT) strongly urges you to support S. 2244, the Terrorism
Risk Insurance Program Reauthorization Act of 2014. S. 2244
would extend the Terrorism Risk Insurance Act (TRIA) for
seven years.
CIAT represents a wide range of businesses and
organizations throughout the transportation, real estate,
manufacturing, construction, energy, education, entertainment
and retail sectors that regularly must obtain insurance
against terrorism. We know firsthand that, as part of its
economic national security, America needs a stable, reliable
terrorism competitive insurance market so employers can
invest in assets and create jobs without assuming the risk
and liabilities of a terrorist attack.
Again, we urge you to support S. 2244 and we thank you for
your consideration of CIAT's concerns on this vital issue.
Sincerely,
The Coalition To Insure Against Terrorism.
____
National Association of Realtors,
July 16, 2014.
Dear Senator: On behalf of the over one-million members of
the National Association of REALTORS (NAR), I urge you to
support S. 2244, the ``Terrorism Risk Insurance Program
Reauthorization Act of 2014,'' when the Senate votes on it on
Thursday, July 17th. This bipartisan legislation, unanimously
approved by the Senate Banking Committee in June, extends the
Terrorism Risk Insurance Act (TRIA) for seven years and makes
minimal changes to a program that has worked since its
inception in 2002 at virtually no cost to taxpayers.
NAR's membership includes commercial practitioners and
brokers who work with clients that would be adversely
affected if TRIA is allowed to expire at the end of 2014, or
if it is renewed in a manner that constricts the ability of
private insurers to make terrorism coverage available and
affordable throughout the country. The current TRIA program
continues to be a success, keeping private terrorism
insurance coverage available and affordable while protecting
taxpayers and limiting the federal government's exposure to
only the most extreme events. Though we do have concerns that
provisions in S. 2244 to increase the mandatory recoupment
amount (from $27.5 billion to $37.5 billion) could adversely
impact the economy in the wake of a terrorist attack, overall
we are pleased that the bill received unanimous bipartisan
support from the Banking Committee. NAR urges the full Senate
to approve it today.
Please give your support to S. 2244 when it reaches the
Senate floor. TRIA provides a crucial framework for economic
recovery in
[[Page S4580]]
the wake of a catastrophic terrorist attack, and allows the
United States to maintain a stable terrorism insurance market
so employers can invest in properties and create jobs without
assuming the risk and liabilities of a terrorist attack. Your
support of this extension bill will aid in preventing market
uncertainty for years to come.
Sincerely,
Steve Brown,
2014 President,
National Association of REALTORS'.
____
National Association of Mutual Insurance Companies,
Property Casualty Insurers Association of America, U.S.
Chamber of Commerce, Commercial Real Estate Finance
Council,
July 8, 2014.
Hon. Harry Reid,
Majority Leader, U.S. Senate,
Washington, DC
Hon. Mitch McConnell,
Minority Leader, U.S. Senate,
Washington, DC.
Dear Majority Leader Reid and Minority Leader McConnell:
The undersigned organizations respectfully request quick
action on S. 2244, the Terrorism Risk Insurance Program
Reauthorization Act of 2014. This bipartisan legislation was
reported last month with a unanimous vote by the Senate
Committee on Banking, Housing, and Urban Affairs and is
essential to retain the Terrorism Risk Insurance Program that
has protected U.S. national and economic security since its
creation following the September 11, 2001 terrorist attacks.
To date, a quarter of the Senators have cosponsored S. 2244.
The TRIA program is a vital piece of the nation's economic
national security infrastructure. The federal government
plays an important and appropriate role in encouraging
private sector involvement in the terrorism insurance
marketplace--thereby protecting and promoting our nation's
finances, security, and economic strength. The Terrorism Risk
Insurance Program has been a remarkable success in achieving
its primary mission to ``protect consumers by addressing
market disruptions and ensure the continued widespread
availability and affordability of property and casualty
insurance for terrorism risk.''
The undersigned parties are very appreciative of the
bipartisan leadership of the Senate Banking Committee in
reporting legislation that increases taxpayer protections
while retaining broad support of consumer groups and the
marketplace. Working together, Sens. Johnson and Crapo and
members of the Committee achieved consensus agreement on a
bipartisan piece of legislation. The bill reauthorizes the
TRIA program for seven years, a period of time that will
bring longer-term certainty to the market and facilitate
economic development, and increases the ultimate private
sector share of the responsibility for insured losses,
thereby reducing any potential burden on the taxpayer.
We are particularly appreciative that the Senate consensus
bill largely maintains the current thresholds that facilitate
broad private participation in the terrorism insurance
market. For example, the bill maintains the current $100
million ``trigger''--the minimum size of a terrorist event
required to trigger any Federal involvement. An excessive
trigger could make it impossible for many small to medium-
sized insurers to continue to write terrorism and other
business coverages. If insurers are forced out of the market,
the result is expected to be less availability of coverage
and less competition. That would be antithetical to TRIA's
stated purposes. Small and medium-sized insurers represent
almost 98 percent of all insurers writing TRIA coverage and
almost half of all TRIA-related premiums. Small and medium-
sized insurers are a critical source of terrorism coverage as
well as other lines of insurance meeting all of needs of
American businesses large and small. The primary impact of
raising the trigger would be on smaller, regional, and niche
insurers whose deductible--and even total exposure--is less
than the amount of an elevated trigger level that has been
set too high. We applaud the crafters of S. 2244 for
recognizing this important fact.
We urge the Senate to take up S. 2244 as quickly as
possible. Consumers are already having to purchase terrorism
insurance coverage that extends beyond TRIA's current
December 31, 2014 expiration without any certainty regarding
the levels of protection TRIA will provide. Many newly issued
policies contain conditional terrorism exclusions, which
could result in no protection for consumers if Congress fails
to act in a timely manner. While most stakeholders prefer a
straight extension of TRIA with no changes, we recognize and
appreciate the bipartisan leadership of the committee in
moving S.2224 forward and hope that you can reach agreement
to bring this legislation to the Senate floor as soon as
possible where we believe it will have overwhelming support.
Given the broad support this bill has already attracted, we
would encourage the full Senate to consider this legislation
as soon as possible with minimal revisions, and in
particular, no amendments to raise the trigger from its
current $100 million level. We believe that the current
version of the legislation will help maintain a vital program
that has succeeded in fostering a robust terrorism insurance
market for consumers and companies of all sizes, at virtually
no cost to the federal government.
Sincerely,
National Association of Mutual Insurance Companies,
Property Casualty Insurers Association of America, U.S.
Chamber of Commerce, Commercial Real Estate Finance
Council.
____
U.S. Chamber of Commerce,
Washington, DC, July 16, 2014.
To the Members of the United States Senate: The U.S.
Chamber of Commerce, the world's largest business federation
representing the interests of more than three million
businesses of all sizes, sectors, and regions, as well as
state and local chambers and industry associations, and
dedicated to promoting, protecting, and defending America's
free enterprise system, strongly supports S. 2244, the
``Terrorism Risk Insurance Program Reauthorization Act of
2014,'' and applauds the Senate Committee on Banking,
Housing, and Urban Affairs for reporting out this important
bill with unanimous support.
In the months following the 9/11 terrorist attacks, the
inability for insurance policyholders to secure terrorism
risk insurance contributed to a paralysis in the economy,
especially in the construction, travel and tourism, and real
estate finance sectors. Since its initial enactment in 2002,
the Terrorism Risk Insurance Act (TRIA) has served as a vital
public-private risk sharing mechanism, ensuring that private
terrorism risk insurance coverage remains commercially
available and that the U.S. economy could more swiftly
recover in the event of a terrorist attack.
Catastrophic terrorism remains an uninsurable risk because
its frequency and location cannot be accurately predicted,
and its potential scale could be economically devastating.
TRIA continues to promote long-term availability of terrorism
risk insurance for catastrophic terror events and provides a
standard of stability for financial markets and recovery
after such an attack.
The Chamber strongly urges you to support S. 2244, the
``Terrorism Risk Insurance Program Reauthorization Act of
2014,'' and may consider votes on, or in relation to, this
bill in our annual How They Voted scorecard.
Sincerely,
R. Bruce Josten.
Mr. CRAPO. Getting terrorism risk insurance right is important in
order to protect taxpayers and to limit economic and physical impacts
of any future terrorist attacks on the United States. This bill will
help us maintain a properly balanced terrorism risk insurance program
that increases the Nation's economic resilience to terrorism. Again, I
thank Chairman Johnson and Senators Schumer, Kirk, Reed, and Heller for
their partnership in bringing this bill forward and encourage its
adoption.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. KIRK. Mr. President, I haven't spoken that much in this Chamber
since I suffered that stroke. I so strongly believe in this legislation
to make it happen.
Behind me is a representation of the world's tallest buildings, the
10 tallest buildings in the world. Only one is in the U.S.A. Look over
at that tallest one. That still distresses me, the Burj Khalifa, which
is right now the tallest building in the world. I believe as the
Senator representing Chicagoland, the city that invented the
skyscraper, that Chicagoland citizens have a right to grow up in the
shadow of the world's tallest buildings. Unless we quantify the risk
for building one of these buildings through the TRIA legislation, we
will not return skyscrapers to the country that invented skyscrapers.
With that I yield back the remainder of my time.
Thank you.
The PRESIDING OFFICER. The Senator from New York.
Mr. SCHUMER. Senator Crapo listed some letters and asked that they be
put in the Record for some groups supporting our legislation.
We have a very long list, and I ask unanimous consent that list be
added to the Record, the supporters of the legislation.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Support S. 2244, the Bipartisan Terrorism Risk Insurance Program
Reauthorization Act of 2014
On April 10th, following two Banking Committee hearings on
the need for Congress to reauthorize TRIA, Senators Schumer
(D-NY), Kirk (R-IL), Reed (D-RI), Heller (R-NV), Murphy (D-
CT), Johanns (R-NE), Warner (D-VA), Blunt (R-MO) and Menendez
(D-NJ) introduced the Terrorism Risk Insurance Program
Reauthorization Act of 2014. The sponsors, working with
Banking Committee Chairman Johnson and Crapo, crafted a
bipartisan compromise with the following key features:
[[Page S4581]]
Long-term extension that will promote national security,
economic growth and market certainty
7 year extension of TRIA until December 31, 2021.
Improve existing taxpayer protections
Gradually raise the insurer co-payment from 15% to 20% over
5 years.
Gradually raise the mandatory recoupment threshold from
$27.5 billion to $37.5 billion over 5 years.
When considering S. 2244, the Banking Committee made
several improvements to the bill offered by both Republican
and Democratic Committee Members, including requiring a study
and rulemaking by the Treasury Department to improve the TRIA
certification process to provide better guidance and
certainty following events that may qualify to be certified
as ``acts of terror'' under the program.
Broad support for S. 2244 and extending TRIA
Unanimous, Bipartisan Support in Committee: By a unanimous
and bipartisan vote of 22-0, the Banking Committee voted on
June 3, 2014, to report S. 2244 to the Senate floor.
Quarter of the Senate are Cosponsors: A quarter of the
Senate is now cosponsors of S. 2244, including the original
sponsors and Senators Blumenthal (D-CT), Booker (D-NJ),
Cardin (D-MD), Chambliss (R-GA), Crapo (R-ID), Donnelly (D-
IN), Durbin (D-IL), Franken (D-MN), Gillibrand (D-NY),
Isakson (R-GA), Johnson (D-SD), Klobuchar (D-MN), Markey (D-
MA), Merkley (D-OR), Mikulski (D-MD), and Tester (D-MT).
Strong Support from a Wide Range of Stakeholders Across the
Country: A large number of businesses and organizations have
called on Congress to extend TRIA and support S. 2244,
including the U.S. Chamber of Commerce, American Hotel and
Lodging Association, Real Estate Roundtable, Realtors,
Mortgage Bankers Association, MLB's Office of the
Commissioner, NBA, NCAA, NFL and NHL.
S. 2244 is strongly supported by a wide range of
organizations, including:
American Association of Port Authorities, American Bankers
Association, American Bankers Insurance Association, American
Bankers Securities Association, American Council of
Engineering Companies, American Gaming Association, American
Hotel and Lodging Association, American Insurance
Association, American Land Title Association, American Public
Gas Association, American Public Power Association, American
Resort Development Association, American Society of
Association Executives, Associated Builders and Contractors,
Associated General Contractors of America, Association of
American Railroads, Association of Art Museum Directors,
Building Owners and Managers Association International,
Boston Properties, Campbell Soup Company.
Coalition to Insure Against Terrorism, Cornerstone Real
Estate Advisers, LLC, CRE Finance Council, CSX Corporation,
Emerson, Financial Services Roundtable, Food Marketing
Institute, Helicopter Association International, Hilton
Worldwide, Host Hotels & Resorts, Inc., Institute of Real
Estate Management, InterContinental Hotel Group,
International Council of Shopping Centers, International
Franchise Association, International Safety Equipment
Association, International Speedway Corporation, Long Island
Import Export Association, Marriott International, Mortgage
Bankers Association, NAIOP.
National Apartment Association, National Association of
Chain Drug Stores, National Association of Home Builders,
National Association of Manufacturers, National Association
of Mutual Insurance Companies (NAMIC), National Association
of REALTORS, National Association of Real Estate Investment
Trusts, National Association for Stock Car Auto Racing
(NASCAR), National Association of Waterfront Employers,
National Basketball Association, National Collegiate Athletic
Association, National Council of Chain Restaurants, National
Football League, National Hockey League, National Multifamily
Housing Council, National Restaurant Association, National
Retail Federation, National Roofing Contractors Association,
National Rural Electric Cooperative Association, New England
Council.
Partnership for NYC, Property Casualty Insurers Association
of America (PCI), Public Sector Alliance, Public Utilities
Risk Management Association, Office of the Commissioner of
Baseball, The Real Estate Board of New York, The Real Estate
Roundtable, Securities Industry and Financial Markets
Association, Self-Insurance Institute of America, Inc.,
Starwood Hotels and Resorts, Tenaska, Taxicab, Limousine &
Paratransit Association, UJA-Federation of New York, United
Airlines, Union Pacific, University Risk Management and
Insurance Association, U.S. Chamber of Commerce, U.S. Travel
Association.
Mr. SCHUMER. Now I would like to discuss the amendment process to
preview it for my colleagues a little bit.
I would also ask unanimous consent that quorum calls be counted
equally against both sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. As was mentioned, I believe by some of my colleagues,
the give-and-take on this bill was ideally how things should work.
First, a bipartisan group of Senators got together and crafted the
legislation. As Senator Crapo noted, there was some push and pull, what
should be the balance between government and the private sector, and we
did move a little bit more in giving greater responsibility to the
private sector. People should note that at the end of the day the
private sector will pay back all the money the government would lay out
if, God forbid, there is a terrorist incident, but it would be over a
period of time of course.
But we had Democrats and Republicans come together and we came up
with a bill. The chairman and ranking member agreed that the bill was a
good idea, held hearings, and then we moved forward with the
legislation.
Then always comes the even greater morass. We do get some bills
passed out of this place with bipartisan support and many of them are
significant bills, but then we go to the floor and we wonder what is
going to happen now. We have the age-old dispute about how many
amendments, what type of amendments, should they be relevant. In this
case we asked colleagues on both sides of the aisle who would want
amendments.
The amendments that came back were reasonable. Most--not all--were
related to terrorism insurance. Those that weren't, such as by Senator
Tester and Senator Vitter, were in the jurisdiction of the Banking
Committee, so they at least had some relationship. We did not get a
flurry of amendments from all over the place on issues that naturally
divide the parties.
Then we had to do some negotiating, but we allowed--Senator Crapo and
Senator Johnson allowed every amendment, that any author who wanted to
offer an amendment could. We worked out some compromises on the Tester
amendment. Senator Coburn had objections, and a compromise was worked
out there. Some were withdrawn, but at the end of the day anyone who
wanted an amendment got it. Both sides showed restraint, and I think
that is what brought us to this position.
So the good news for my colleagues, we have a very limited number of
amendments, and we intend to dispose of the entire bill before lunch
this morning.
Let me briefly go over the amendments.
Senator Coburn will offer an amendment on recoupment timing. The
Coburn amendment would give the Treasury Secretary the ability to
extend the recoupment period of up to 10 years following an attack. The
problem is the way Senator Coburn had drafted his amendment, it would
create a significant score. He offered in it the Banking Committee and
it failed on a bipartisan vote, the majority of both parties, I
believe, voting against it. But he wanted to offer it on the floor, and
so he will.
There is a point of order, a pay-go point of order that will be
raised against the Coburn amendment, and I will raise that because it
does break the budget. It doesn't have a pay-for in exchange for it. So
Chairman Johnson and I believe the sponsors of the legislation
recommend a ``no'' vote on waiving pay-go against the Coburn amendment.
The Tester amendment, as modified by Senator Coburn, I believe will
be voice-voted. Senator Tester and Senator Johanns described that
adequately, but it is something long overdue that would create a
National Association of Registered Agents and Brokers and make the
whole brokerage business work more smoothly. It has very broad support
in this body.
Senator Vitter will offer an amendment that would require the
President to nominate at least one individual with primary experience
working in or supervising community banks on the Federal Reserve Board
of Governors. I am sure he will come to the floor to explain his
amendment. We expect this amendment, which we will all agree to, will
be approved by voice vote, and Chairman Johnson has recommended a voice
vote to the Members on our side.
Finally, there is a Flake amendment that would create an advisory
committee on risk-sharing mechanisms. Again, I think Senator Flake will
come down at some point and explain his amendment. There will be a
recorded vote on this at least as planned now, and I will be supportive
and I know Chairman Johnson again has recommended a ``yes'' vote on the
Flake amendment.
[[Page S4582]]
With that, I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. FLAKE. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded. 59/b
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 3551
Mr. FLAKE. I ask unanimous consent to temporarily set aside the
pending amendment so I may call up my amendment 3551, which is at the
desk.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report the amendment.
The legislative clerk read as follows:
The Senator from Arizona [Mr. Flake] proposes an amendment
numbered 3551.
The amendment is as follows:
(Purpose: To establish the Advisory Committee on Risk-Sharing
Mechanisms)
On page 13, after line 22, insert the following:
SEC. 8. ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS.
(a) Finding; Rule of Construction.--
(1) Finding.--Congress finds that it is desirable to
encourage the growth of nongovernmental, private market
reinsurance capacity for protection against losses arising
from acts of terrorism.
(2) Rule of construction.--Nothing in this Act, any
amendment made by this Act, or the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) shall prohibit insurers
from developing risk-sharing mechanisms to voluntarily
reinsure terrorism losses between and among themselves.
(b) Advisory Committee on Risk-Sharing Mechanisms.--
(1) Establishment.--The Secretary of the Treasury shall
establish and appoint an advisory committee to be known as
the ``Advisory Committee on Risk-Sharing Mechanisms''
(referred to in this subsection as the ``Advisory
Committee'').
(2) Duties.--The Advisory Committee shall provide advice,
recommendations, and encouragement with respect to the
creation and development of the nongovernmental risk-sharing
mechanisms described under subsection (a).
(3) Membership.--The Advisory Committee shall be composed
of 9 members who are directors, officers, or other employees
of insurers, reinsurers, or capital market participants that
are participating or that desire to participate in the
nongovernmental risk-sharing mechanisms described under
subsection (a), and who are representative of the affected
sectors of the insurance industry, including commercial
property insurance, commercial casualty insurance,
reinsurance, and alternative risk transfer industries.
(c) Effective Date.--The provisions of this section shall
take effect on January 1, 2015.
Mr. FLAKE. Mr. President, I am pleased to have the opportunity to
offer this amendment. I thank my colleagues, the ranking member of the
Banking Committee, and the senior Senator from New York for working
with my office to make this possible.
The Terrorism Risk Insurance Program Reauthorization Act before us
extends for 7 years the Federal loss sharing program developed in
response to the market destructions that were caused by 9/11. Created
in 2002, the Terrorism Risk Insurance Program was intended to be just a
3-year program. This program has since been extended twice, and the
bill before us would extend its life through December 31, 2021.
Given the longevity of the program, I think it would be prudent for
us to focus some attention on the growing private market reinsurance
capability and capacity.
My amendment simply establishes an advisory committee composed of
members of the insurance industry to provide recommendations to
accelerate the creation and development of private nongovernmental
risk-sharing mechanisms for terrorism losses. I urge my colleagues to
join me in taking this modest step toward developing a functioning
private-run market for terrorism risk insurance, thereby reducing
dependency on the Federal Government in this regard.
I yield the floor and I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. CRAPO. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Booker). Without objection, it is so
ordered.
Mr. CRAPO. Mr. President, I wish to take this opportunity to make
comments on a couple of the amendments that have been or will be
presented to the bill.
First, with regard to the amendment presented by Senator Flake. As I
mentioned in my opening remarks, I support this amendment. One of the
issues we deal with in the reauthorization of TRIA each time we face it
is the correct balance and the level of government protection and
support that needs to be in place to help the market deal with major
catastrophic events in the United States and the level of requirement
we insist there be from the private sector and how they will step in
and deal with these risks on an insurance basis rather than requiring
the taxpayers to be the ultimate backstop.
Ultimately our objective should be and must be that the taxpayer be
relieved of this kind of burden and that the private sector step in and
cover the risks through our private sector insurance markets. I think
we have a pretty broad consensus that we are not at the level yet where
we can get there, but each time we have reauthorized TRIA, we have
moved it closer to that objective, and this legislation itself moves it
closer.
As I said in my introductory remarks, we have increased the retention
level--in other words, the amount of money the private sector must pay
back to the Treasury if the taxpayer is ultimately required to step in
and backstop a catastrophic terrorist attack. This legislation will
increase that amount by another $10 billion--from $27.5 billion to
$37.5 billion. We are also increasing the amount of money which the
private sector insurance industry must put up upfront before the
government steps in and provides a backstop. We are increasing that
from a 15-percent copay to 20-percent copay.
We are taking significant steps in this legislation to get to the
ultimate objective of having the private sector fully handle the
insurance risk due to a catastrophic terrorist attack.
Senator Flake has provided an amendment, which I support, that would
help us create an advisory committee that will focus on this specific
issue and help us to find private sector solutions to allow us to
further decrease the program in the future reauthorizations. I think
this is an incredibly important amendment, and I believe there is
strong bipartisan support for it. It allows us to have advice and
support from this advisory committee that would be created under his
amendment to take further and more important steps toward achieving the
ultimate objective of having to be able to eliminate the need for
taxpayer involvement in dealing with catastrophic events such as a
terrorist attack.
I strongly support the addition of the Flake amendment. I believe the
advisory committee he proposes will find private sector solutions which
will allow us to further decrease and ultimately eliminate the program
in future reauthorizations.
Another amendment that has been discussed on the floor today by
Senator Tester of Montana and Senator Johanns of Nebraska is the NARAB
amendment, which is an amendment that will be added to this
legislation. This is also an important piece of legislation from the
banking committee and it is called the National Association of
Registered Agents and Brokers, or NARAB. Again, it is a bipartisan
piece of legislation that has strong support across the United States
in various industries to try to allow our registered agents and brokers
to have a more efficient and effective system in which to obtain
necessary authorization to conduct their business nationwide.
I am an original cosponsor of this language because it simplifies the
process of agent licensing across State lines while preserving the
authority of State insurance regulators. This bill has broad support
from the insurance community, including the National Association of
Insurance Commissioners, the Independent Insurance Agents and Brokers
of America, the National Association of Insurance and Financial
Advisers, and the Council of Insurance Agents and Brokers.
The creation of NARAB will allow agents and brokers to focus on their
responsibilities to their clients and spend
[[Page S4583]]
less time dealing with redtape. By reducing costs and increasing
competition among insurance producers, we will generate lower costs and
better service for consumers. Importantly, NARAB II deals specifically
with marketplace entry and would not impact the States' jurisdiction
over day-to-day authority in the insurance marketplace. This is a very
critical point because I believe one of the biggest issues relating to
this legislation is preserving and protecting States rights and State
jurisdiction with regard to regulation of the insurance marketplace.
Insurance commissioners of the States will be able to better catch
bad actors who, after losing a license in one State, move quickly to
enter into another State. State regulators will serve on the board of
NARAB with the same objectives they have as insurance commissioners--to
protect the public interest by promoting the fair and equitable
treatment of insurance consumers.
The idea for NARAB is now 14 years old. We have literally been
working on it for that long, and I am hoping we can get this
legislation across the finish line today.
These are two important amendments that will come forward today with
regard to the TRIA legislation, and there are several more. As we move
forward today I am hopeful we will make the kind of progress on these
important and critical issues that will enable us to not only pass this
legislation but to do so with a strong vote here in the Senate and then
get us into a conference with the House so we can put this important
legislation, which has been developed on a bipartisan basis, on the
President's desk.
Far too often we are seeing gridlock in this Chamber. We have two
pieces of legislation today where we have a bipartisan agreement and
bipartisan support, and I think it is a good day for the Senate to see
this kind of legislation moving forward.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. MURPHY. Thank you, Mr. President. Let me join my friend Senator
Crapo in congratulating the leadership on both the Republican and
Democratic side and the leadership on the banking committee for
bringing this bill before us this morning. It is, unfortunately, all
too rare when we can bring a piece of legislation to the floor that has
been worked on by both sides of the aisle and has broad agreement on
both sides of the aisle. Of course, as the Senator from Idaho knows,
there is nothing partisan about the effects of not reauthorizing TRIA.
This is going to affect every part of the country. Republicans and
Democrats, people of liberal and conservative persuasions, will
ultimately be paying a lot more and losing a lot more because of our
failure to get this bill done. So let me again thank Senator Crapo and
Senator Johnson for all the work they have done. I was one of the
original cointroducers of this bill, along with Senator Schumer and
Senator Reid, as well as Senators Menendez, Warner, Kirk, Heller,
Johanns, and Blunt.
Ultimately, we were educated by what happened in the weeks and months
following September 11. In that period of time, the real estate market
in large parts of this country--certainly in my part of the country
surrounding New York City--collapsed. As a result, $15 billion worth of
projects stalled overnight, and we lost about 300,000 construction jobs
that were planned to come online--all because the insurance industry
decided, with justification, that they could no longer insure for the
risk of terrorism. Prior to September 11 we got coverage for terrorism
essentially at no cost. But after September 11, again, for good reason,
for good cause, insurers, without knowing what their exposure was going
to be should there be another attack, decided they could no longer
insure for that risk. So, in this sense, it logically fell to the
Federal Government to provide that assurance that no matter where one
is--whether in Idaho or Nebraska or Connecticut or New Jersey--if a
person is building a project and they were the subject of terrorism,
they would get a backstop of protection for those losses.
Some said at the time: Why don't we treat insurance, when it comes to
protecting for terrorism, the same as we protect against other
disasters? Of course, we see these threats as fundamentally different.
We can make a decision as to whether we want to live in a part of the
country that may be subject to greater risk from floods or hurricanes.
So we have grown to accept the fact that we are going to pay a little
bit more if we are going to have a house or a business right on the
water. And we have a program here by which we mitigate that risk so
that it is not extraordinarily different, understanding there is still
good reason why people have to congregate in those spaces. But a
terrorist attack, frankly, whether it happens in New York City right on
the precipice of Connecticut, or in Los Angeles or in a rural
environment in the Midwest, is an attack on the United States of
America. That is an attack on all of us, no matter what specific
geography in which it happens to be located. So that is why we made the
decision as a Nation to help backstop those localities that may feel
the initial burden of having to reconstruct after a terrorism attack,
because we believe it is a national responsibility.
So for the practical reason that there was no longer an ability for
the insurance industry to calculate how on Earth they would assess a
premium based on the enormous potential loss of a terrorist event, and
because of the fact that as Americans we felt as though we should come
together and insure against this risk, we passed TRIA initially. Over
time we have come together as Republicans and Democrats to reauthorize
it.
Now, as time has gone on, we have had a conversation about how to
best share this responsibility between the public sector and the
private sector, because we expect that private insurers still should,
as is their business, pick up some of this cost. So this version of the
bill continues along the line of transferring some of this
responsibility from the Federal Government and the Federal taxpayers to
private insurers. For instance, the underlying legislation continues to
have a 20-percent deductible. But after that 20-percent deductible is
met, under the previous version of the bill the insurer was responsible
for picking up 15 percent of the cost. Under this bill they are going
to pick up 20 percent of the cost. So there is a little bit more
responsibility built in for the cost of paying out claims after a
terrorist attack is picked up by insurers.
There is a provision in the bill which says the Federal Treasury will
recoup the costs from insurers of any claims it pays out. It can do
that over a long period of time. Previously, it was mandatory to recoup
all of that money for claims under $27 billion. Now that number is $37
billion. So we now have a mandatory return to the Treasury of any
claims under $37 billion, which is an additional protection for
taxpayers as well as an additional responsibility for insurers now
because we will collect from the insurers for losses up to a higher
amount than the previous law. I think all of this is pretty reasonable.
I wish there were more days such as this and weeks such as this--
although maybe TRIA isn't infused with the same kind of politics that
other issues such as immigration reform and energy reform and criminal
justice reform can be--but this was made possible by some really hard
work by a number of people who knew this was right to do for the
country. Speaking as a Senator from a State that has a big stake in the
reauthorization of TRIA, I say thank you to all of the people who made
this possible and give an advanced shout-out to the House of
Representatives which we hope will pass this bipartisan bill in an
expeditious manner. Connecticut cares about this because we were, as I
said, on the edge of the attack of September 11. We lost dozens and
dozens of Connecticut residents in that attack. Our economy was
effectively shut down because of the inability to assess this risk
throughout the real estate sector surrounding New York City. But we
also are home to some of the biggest and, frankly, most responsible
property and casualty insurers. The Hartford and Travelers, in
particular, have been a big part of trying to figure out a public-
private partnership to solve this problem, and this certainly helps
them to be able to provide more of a very important product to the rest
of the country.
So, again, my thanks to all of those who made this piece of
legislation possible. My hope is we get a big vote later today across
the aisle, sending a message to the House of Representatives
[[Page S4584]]
that they can take this bipartisan piece of legislation, pass it, and
then get it to the President's desk. Then we can, once again, give some
sense of surety to our insurance markets and our real estate market
that the United States of America is, once again, going to step up and
decide that terrorism, no matter where it happens--whether it is in New
York City or in Topeka--is not going to get this country back.
I yield the floor, and I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll. The assistant
legislative clerk proceeded to call the roll.
Mr. VITTER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 3550
Mr. VITTER. Mr. President, I ask unanimous consent to temporarily set
aside the pending amendment so that I may call up my amendment No.
3550, which is at the desk.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Louisiana [Mr. Vitter] proposes an
amendment numbered 3550.
Mr. VITTER. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To reaffirm the importance of community banking and community
banking regulatory experience on the Federal Reserve Board of
Governors, to ensure the Federal Reserve Board of Governors has a
member who has previous experience in community banking or community
banking supervision)
On page 13, after line 22, add the following:
SEC. 8. MEMBERSHIP OF BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
(a) In General.--The first undesignated paragraph of
section 10 of the Federal Reserve Act (12 U.S.C. 241) is
amended by inserting after the second sentence the following:
``In selecting members of the Board, the President shall
appoint at least 1 member with demonstrated primary
experience working in or supervising community banks having
less than $10,000,000,000 in total assets.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of enactment of this Act and
apply to appointments made on and after that effective date,
excluding any nomination pending in the Senate on that date.
Mr. VITTER. Mr. President, I rise to talk about this amendment which
I look forward to being adopted on this important terrorism risk
insurance reauthorization bill. It is a commonsense amendment. It is
about the Federal Reserve Board, and it says at least one member of
that important Board should have significant experience as a community
banker or a community bank supervisor.
This used to be commonplace because community banks--smaller
institutions--were and are an important part of our financial system.
In fact, these days it is one part of our financial system that sets us
apart from many others, such as Canada and Europe, which are far more
dominated by mega-institutions. Of course, the United States has some
very big institutions, and they serve an important role and they have
an important place, but smaller institutions, so-called community
banks, serve a vital role as well and particularly in smaller
communities and in more rural areas they serve those communities in a
way megabanks simply do not.
I have been looking at this trend on the Federal Reserve, and
unfortunately there is an unmistakable trend away from having adequate
representation from folks with community bank experience; that same
trend has been toward having the Federal Reserve Board completely
dominated by academics and folks with megabank and academic economist
experience.
This chart I have in the Chamber shows that trend. From 1936 until
the present, it goes decade by decade. The chart is a little busy, and
we have this color coding here, but basically we can see this huge
growth in the domination of this red category: folks with pure academic
economic experience. Folks with community bank experience, which used
to actually dominate the Federal Reserve Board several decades ago, are
now very limited.
Look, there is nothing wrong with folks with academic experience, but
it should not be so dominant on the Federal Reserve and we should have
regular representation from community banks or community bank
supervisors because that is a vital part of our banking system.
My amendment is therefore very simple. It would mandate that at least
one member of the Federal Reserve Board have that experience, have
direct community bank experience or have direct experience as a
community bank supervisor. Specifically, we are talking about
institutions with less than $10 billion in total assets.
This bill follows a letter several of my colleagues joined me in
sending to President Obama. We were asking him to nominate an
individual with that sort of experience, and I thank the cosigners on
that letter: Senators Tester, Moran, Merkley, Coburn, and Johanns on
the committee; and noncommittee Members Senators Hirono, King, Franken,
Baldwin, Begich, Landrieu, Heinrich, and Udall.
We seem to be making progress in that regard. There is widespread
reporting that the White House is considering a list of candidates for
the Federal Reserve with community banking experience. But this
specific mandate--just one member, a very modest mandate--would help
ensure that happens and would help ensure that regularly happens into
the future to reverse this trend, to get more balance on the Federal
Reserve Board.
This is very important in the context of the too-big-to-fail debate.
Too big to fail helped lead to the crisis several years ago in the
banking industry. It helped lead to the massive bailouts of mega-
institutions, and unfortunately I am one who believes--and there are
many others--that too big to fail is alive and well today, and in some
ways Dodd-Frank institutionalized too big to fail. It did not end too
big to fail in any way.
We need to do a number of things to even the playing field, to make
it fairer for smaller institutions, community banks that serve our
smaller communities in rural areas, particularly on the Federal Reserve
Board, which is such a significant governing and supervisory board in
our banking industry.
I specifically thank the ranking member of the committee, Senator
Crapo, for his support of this concept, his support in negotiations of
this amendment, and his very active involvement in getting this
amendment accepted on to the TRIA bill.
I think the ranking member may have a few words about this and other
matters. I will relinquish the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAPO. Mr. President, I will just take a moment to speak about
Senator Vitter's amendment, which I strongly support.
During Dr. Yellen's nomination hearing, I noted the need to fill
additional vacancies at the Federal Reserve Board with individuals
bringing balanced viewpoints. The President should nominate someone
with community bank experience to the Board to fill at least one of the
remaining vacancies.
Community banks play an important role in their local economies and
face a disproportionate burden from our existing regulations. We should
ensure that the perspective of these banks is represented in
policymaking. That is what this amendment does, and I encourage my
colleagues to support it.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. VITTER. Mr. President, just one final wrapup issue. I ask
unanimous consent to have printed in the Record a letter of support for
this amendment from ICBA, the Independent Community Bankers of America.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Independent Community
Bankers of America,
Washington, DC, July 17, 2014.
U.S. Senate,
Washington, DC.
Dear Senator: On behalf of the Independent Community
Bankers of America and the more than 6,500 community banks
nationwide, I write to urge you to vote YES on Amendment
3550, offered by Senator David Vitter, to the Terrorism Risk
Insurance Program Reauthorization Act of 2014 (S. 2244). This
amendment would ensure at least one member of the Board of
Governors of the Federal Reserve (the Board) has experience
as a community banker or as a supervisor of community banks.
The Board not only plays
[[Page S4585]]
a key role in our economy by promoting employment and stable
prices, but is also an important regulatory body for the U.S.
and global financial system. A broad range of representation
on the Board is critical to its effectiveness.
Community banks are vitally important to the nation's
economy, particularly with respect to small business lending
and providing banking services in small and rural
communities. These banks and the communities they serve have
vital interests at stake in the economic, banking, and
payment system issues that come before the Board. The Board
must consider how best to tier regulation to meet regulatory
objectives without disproportionately impacting community
banks. Expertise is also required to ensure that regulations
intended for the largest banks do not unintentionally sweep
in community banks. The unexpected compliance problems
associated with the December 2013 Volcker Rule vividly
illustrate this risk.
By requiring community bank representation on the Board,
Senator Vitter's amendment will help secure the future of the
community banking industry and the customers and communities
that depend on it. Again, ICBA urges you to vote YES on this
important amendment.
Thank you for your consideration.
Sincerely,
Camden R. Fine,
President and CEO.
Mr. VITTER. Thank you, Mr. President.
The PRESIDING OFFICER. The Senator from Oklahoma.
Amendment No. 3549
Mr. COBURN. Mr. President, I ask unanimous consent that the pending
amendment be set aside and my amendment No. 3549 be called up.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Oklahoma [Mr. Coburn] proposes an amendment numbered
3549.
Mr. COBURN. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To allow the Secretary to extend the deadline for collecting
terrorism loss risk-spreading premiums if the mandatory recoupment is
morethan $1,000,000,000)
On page 4, line 21, strike ``(i)''.
On page 4, between lines 21 and 22, insert the following:
(i) in clause (i)--
On page 4, line 22, strike ``(i)'' and insert ``(I)'' and
move such subclause 2 ems to the right.
On page 4, line 23, strike ``(I)'' and insert ``(aa)''and
move such item 2 ems to the right.
On page 5, line 1, strike ``(II)'' and insert ``(bb)'' and
move such item 2 ems to the right.
On page 5, line 3, strike ``(ii)'' and insert ``(II)'' and
move such subclause 2 ems to the right.
On page 5, line 4, strike ``(I)'' and insert ``(aa)'' and
move such item 2 ems to the right.
On page 5, line 6, strike ``(II)'' and insert ``(bb)'' and
move such item 2 ems to the right.
On page 5, line 8, strike ``(III)'' and insert ``(cc)'' and
move such item 2 ems to the right.
On page 5, line 10, strike ``(iii)'' and insert ``(III)''
and move such subclause 2 ems to the right.
On page 5, line 11, strike ``(I)'' and insert ``(aa)'' and
move such item 2 ems to the right.
On page 5, line 13, strike ``(II)'' and insert ``(bb)'' and
move such item 2 ems to the right.
On page 5, line 14, strike the period at the end and insert
``; and''.
On page 5, between lines 14 and 15, insert the following:
(ii) by adding at the end the following:
``(iii) Deadline extensions.--
``(I) In general.--If the mandatory recoupment amount under
subparagraph (A) is more than $1,000,000,000 in any given
calendar year, the Secretary may extend the applicable
deadline for collecting terrorism loss risk-spreading
premiums under clause (i) for a period not to exceed more
than 10 years after the date on which such act of terrorism
occurred.
``(II) Determination.--Any determination by the Secretary
to grant an extension under subclause (I) shall be based on--
``(aa) the economic conditions in the commercial
marketplace, including the capitalization, profitability, and
investment returns of the insurance industry and the current
cycle of the insurance markets;
``(bb) the affordability of commercial insurance for small-
and medium-sized businesses; and
``(cc) such other factors as the Secretary considers
appropriate.
``(III) Report.--If the Secretary grants an extension under
subclause (I), the Secretary shall promptly submit to
Congress a report--
``(aa) justifying the reason for such extension; and
``(bb) detailing a plan for the collection of the required
terrorism loss risk-spreading premiums.''.
Mr. COBURN. Mr. President, we have before us a bill where
unfortunately we do not believe in markets. We are told markets will
not work, so we have a terrorism risk insurance bill. That means the
Federal Government is going to be the insurer of last resort. There
have been some improvements over what we have put forward in the past,
and I agree with those improvements if in fact we have to do this. I am
not convinced we have to do it, but we are going to do it, and I
understand that. I think the work of the committee, of which I am a
member, has been very good.
But there is one real problem with this bill, and it is about smoke
and mirrors, it is about not being honest with the American people.
This bill was designed so it would have no score. It was not designed
to do the best we can for America should we have a tragedy, and it was
not designed to create the flexibility that would be necessary if we do
have a tragedy.
Let me outline this for you. The way this bill is set up is that we
could have a significant tragedy, God forbid, in this country from a
terrorist attack, and the bill will mandate spikes in casualty and
property insurance far above what will need to happen because we passed
the bill to pass a CBO score. So what could happen is we would have to
collect billions of dollars over an 18-month period through premium
increases on everybody in the country, not just where we had the
problem--everybody in the country--because we have designed a bill that
will in fact mandate that or at least could mandate that.
I have been around this place for 10 years. I know exactly what is
going to happen if that comes about through this TRIA bill. The first
thing that will happen is the Senate and the House will pass an
elimination of this requirement. So what will happen is the American
taxpayer will get stuck with all this. They all know that. Everybody
agrees they designed the bill to meet CBO. So what I put in was an
amendment that would give flexibility to the Treasury so we do not,
after one tragedy, create another tragedy with markedly elevated
casualty and property rates. We still recoup the money, but we do it
over a longer period of time, if it is necessary, and we give the
Secretary of the Treasury the ability to do that.
My friend from New York says there is a budget point of order that
lies against it. It does according to CBO. I agree, it does. But the
difference between this and most budget points of order is my amendment
will not increase the deficit one penny--not one penny.
I would also note that my colleague from New York has voted to
override budget points of order every time they have been offered this
year. So it is going to be curious to me to all of a sudden have a
budget point of order raised by someone who has voted to override the
budget point of order every time it has been offered in the Senate this
session, and it goes to why we should not pass this bill without common
sense in terms of how we collect the recoupment.
I understand the constraints of CBO, but I also understand common
sense. So we are going to play the game on the constraints, and we are
ultimately going to pass on--rather than recoup--we are ultimately
going to pass it on to the American taxpayer, which hollows out the
whole purpose of the bill.
So this has a billion-dollar score, on which we are going to have a
point of order, which I am sure I will lose. But when you vote for this
bill, know you are not voting for what the bill says it is going to do
because it is going to do something completely different than what it
says, if we were to have one of these catastrophies.
The political pressure to not have these massive increases in
property and casualty insurance--this place will fall, and so will the
House, and we will change this, and we will have the score then. We
will have the score then, and ultimately your children will pay for the
cost of this terrorism risk insurance, not the people who are owning
the property today, not the insurance company. We will just kick the
can down the road, just as we have on everything else.
It would seem to me that we would want to do something that works
along
[[Page S4586]]
the parameters of this bill, and we ought to build in flexibility to
this bill so that--it may be 10 years that we get on one of these
because the bill is divided up to meet the score so it does not score
in any one period. So over an 18-month period we could have to recoup
it all and people could not tolerate those kinds of rate increases in
their businesses or their homes. They would not be able to tolerate it
and we would change it. Just as I am asking for us to change it now and
be honest with the American people, we are going to change it if that
happens.
We will change this, and we will delay the onset of the collection of
this recoupment. Everybody knows that will happen. So why not be honest
about it and put it in the bill now and waive the budget point of order
because it does not change the deficit one penny. It changes when we
collect it, but we still collect it against the risk of not collecting
it at all.
That is what I ask my colleagues. I do not expect to win the
amendment, but it is another confirmation to the American people that
we are not about truth, we are not about doing commonsense things; we
are about playing games and we are about satisfying the demands of the
industry over which this applies.
Nobody knows what could happen in this country in terms of terrorism,
but everybody knows I am right about this issue.
All I am saying is: Fess up. Be honest, colleagues. Let's build the
flexibility in this so we do not have to address it, and the Treasury
Secretary, no matter whether it is a Democrat or Republican
administration, can use common sense to guide about how fast this
recoupment will come; otherwise, you have not done anything to improve
this bill if, in fact, this is not accepted.
I will be leaving here at the end of the year. Hopefully, we never
see another terrorism event in this country. But if we do, it will be a
sweet irony when you all say: Oops, time out. We are not going to do
what we said we were going to do in that bill because the country
cannot take it. What you will do is put one tragic event on top of
another. You will not do that. So what will happen? You will change
this bill. You will get that score. You will call it an emergency. You
will do it anyway.
All I am asking is, be honest about what is going to ultimately
happen on this should we have an event and it fall within one of these
close parameters, based on what we said in the bill, because we are
running the bill according to what CBO says, not as to what common
sense is.
I look forward to having a vote on this amendment. I understand my
likelihood of being successful. But I also understand the lack of
honesty in dealing with the American people if we do not accept this
amendment.
I yield the floor.
Terrorist Attacks
Mr. REED. Mr. President, I join with my colleagues to speak about S.
2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014,
TRIA, which I have cosponsored.
First, I commend Banking Committee Chairman Johnson and Ranking
Member Crapo for their leadership on this important issue. Their
efforts, along with those of the sponsors and cosponsors of the bill,
led to a unanimous committee vote of 22 to 0 to report the legislation
favorably to the full Senate. It is heartening to see legislation like
this come together on such a strong bipartisan basis.
Reauthorizing TRIA is vital and not just from a Banking Committee
perspective. I also have the privilege of serving on the Armed Services
Committee. It is through this dual lens, and from what we know of the
significant terrorist threats our Nation still faces, that compels me
to believe that we need to reauthorize TRIA as soon as possible.
We must keep markets effectively and efficiently operating in light
of these threats. We must continue to have policies in place to make
sure our economy stays on track in the event of another attack on our
Nation.
In short, reauthorizing TRIA is not only a matter of economic
security; it is also a matter of national security. And so, I again
thank the chairman for his leadership on this vital issue.
Mr. JOHNSON of South Dakota. I thank Senator Reed for his valuable
contributions to the work of the Banking Committee. I also thank him
for working with me on this matter and for his continued efforts to
bolster our national security.
Mr. REED. I thank the chairman. I would like to clarify one point.
While TRIA is silent on whether a nuclear, chemical, biological, or
radiological related terrorist attack or any kind of cyber-related
attack are covered, I believe our intent with S. 2244 is that these
attacks would continue to fall within the scope of TRIA's covered
lines, as they do today, provided that statutory prerequisites are met.
Does the chairman agree with this assessment?
Mr. JOHNSON of South Dakota. Yes. The Committee makes this point
clear in the Committee Report for S. 2244, and I thank the Senator
again for his work on this issue.
Mr. REED. I thank the chairman again, and I look forward to swift
passage of this legislation here in the Senate, and hopefully in the
House as well.
Mr. NELSON. Mr. President, today I commend my colleagues for a strong
bipartisan vote in favor of S. 2244, the Terrorism Risk Insurance
Program Reauthorization Act.
After the attacks of September 11, 2001, the Terrorism Risk Insurance
Act, or TRIA, helped stabilize the commercial property market. This has
allowed for continued commercial property development and real estate
lending for office buildings, hotels, malls, and tourist attractions
across the United States. In Florida, TRIA has been particularly
important for continued development in the tourism sector--which is a
critical part of the economy.
The passage of S. 2244 today illustrates the widespread, continued
support for TRIA and the need for a backstop to guarantee sufficient
capacity for businesses to insure against catastrophic terrorist
events, including coverage for events involving a nuclear, biological,
chemical or radiological element. At the same time, S. 2244 also
ensures that taxpayers are a top priority and includes a recoupment
mechanism to guarantee that taxpayers are made whole if the backstop is
triggered.
I now hope that the House of Representatives will take quick action
on S. 2244 so that the President can sign this legislation and assure
continued stability in the commercial property and insurance market.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. JOHNSON of South Dakota. Mr. President, I rise today to support
S. 2244, the Terrorism Risk Insurance Program Reauthorization Act.
Congress first enacted TRIA into law in 2002 after the commercial
property sector saw major disruptions in the ability to obtain
financing and terrorism risk insurance following the September 11
terrorist attacks.
TRIA stabilized the markets and provided a government backstop to
these unique markets, allowing commercial property development and real
estate lending to continue for everything from hotels, stadiums, malls,
to tourist attractions across the country. Experts and stakeholders
testified at several banking committee hearings that there remains a
clear and longstanding need for the kind of government backstop TRIA
provides.
We also learned the private insurance market for terrorism risk
exists because of TRIA, not in spite of it.
The long-term 7-year extension this bipartisan bill provides will
promote national security, economic growth, and market certainty. While
many Members in this Chamber would be fine with extending TRIA in its
current form, this tough compromise has two additional changes that
will further protect taxpayers: gradually raising both the insurer
copayment from 15 percent to 20 percent, and the mandatory recoupment
threshold from $27.5 billion to $37.5 billion.
We were careful, however, in reaching this compromise not to raise
the trigger, which would drive small insurers out of the market and
reduce the availability and affordability of coverage for businesses
nationwide. This bipartisan bill also does not pick what modes of
terrorist attacks should get preferential treatment over other forms of
attacks.
The entire Senate banking committee voted to report the bill to the
floor by a unanimous and bipartisan 22-to-0 vote. Stakeholders across
the board strongly support the Senate's bipartisan approach to
extending TRIA,
[[Page S4587]]
including the U.S. Chamber of Commerce, the American Hotel and Lodging
Association, the National Association of Mutual Insurance Companies,
and the Real Estate Roundtable, to name just a few.
Let me commend Senators Schumer, Crapo, Kirk, Reed, Heller, and
others from both sides of the aisle for their leadership on this issue.
I thank them as well as their staffs for working with Ranking Member
Crapo and me and our staffs to craft this bipartisan compromise to
extend TRIA for another 7 years. We would not be here today without all
of their efforts.
TRIA must be renewed soon, given the program expires at the end of
the year, and policyholders have increasingly reported challenges in
renewing contracts for 2015. To that end, I urge my colleagues to
support S. 2244.
I yield the floor and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. HELLER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HELLER. Mr. President, I rise to speak on S. 2244, the Terrorism
Risk Insurance Program Reauthorization Act. This is a bill I have
worked on closely with my colleagues Senators Schumer, Kirk, and Reed
from Rhode Island. I also want to thank Chairman Johnson and Ranking
Member Crapo, who have been instrumental in getting this bill to this
point. Without their leadership, we would not be here today.
The terrorist attacks on September 11 caused a sudden and dramatic
shock in the domestic market for terrorism insurance. After the attack
there was a tremendous amount of uncertainty about the frequency and
potential size of future attacks. Insurers quickly withdrew from the
terrorist coverage market, and a new threat to our economy emerged.
In response, Congress passed TRIA, to provide a Federal insurance
backstop for terrorism coverage. Since the passage in 2002, TRIA has
helped ensure the widespread availability of affordable insurance
against terrorism. This helped spur new development and protected
existing real estate throughout our country.
TRIA was reauthorized in 2005 and reauthorized again in 2007. It is
currently set to expire at the end of this year unless Congress acts.
Unfortunately, the tragic bombing in Boston last year has shown that
even years after September 11, the threat of terrorism still exists and
we must continue our efforts to prevent, respond, and recover from any
possible attacks in the future.
I wish to remind my colleagues that terrorism is not only an issue
for big cities in New Jersey, on the east coast, in the Midwest,
Chicago, terrorism is a real threat in both rural and urban areas,
north, south, east, and west. That is why I have been so involved in
trying to get TRIA extended.
In my home State, Las Vegas is considered one of the leading
international business and tourism destination cities in the world.
Southern Nevada welcomes almost 40 million tourists annually and has a
population of nearly 2 million people. We have 35 major hotels along
the Las Vegas strip. Many of them could have up to 15,000 occupants at
any given time. According to the Las Vegas Metro Chamber of Commerce,
in 2013, the total economic impact of tourism was $45.2 billion,
supporting 47 percent of the region's gross product, and 383,000 jobs,
nearly half of the total workforce in southern Nevada.
My point in citing these statistics is if a terrorist attack were to
occur in Las Vegas, our entire State economy would be devastated
without TRIA.
It is not just about Las Vegas. In northern Nevada, our tourism and
gaming industry is the largest private employer in Washoe County, which
also includes Reno. They know that unless they have access to
affordable terrorism coverage, they will have difficulty starting new
capital projects and creating new jobs.
You will find similar stories across our Nation in every State.
Currently, there is no evidence that the terrorism risk insurance
market is prepared to provide coverage without TRIA. Without TRIA, most
developments would halt because businesses would not be able to access
and afford the necessary insurance that is often required to secure a
loan.
TRIA has helped many hotels, hospitals, office complexes, shopping
centers, colleges, and universities have access to terrorism insurance
coverage.
The bill before us today is truly a bipartisan bill. It received a
unanimous 22-to-0 vote in the banking committee. Such a strong vote
only reinforces the bipartisan work that went into crafting this
legislation.
I, along with my colleagues on the Banking, Housing, and Urban
Affairs Committee, agreed to several key reforms that would increase
the insurance industry's aggregate retention level and coinsurance
levels, which will significantly reduce the potential cost to
taxpayers.
It is my hope that we can easily pass this important legislation with
a strong bipartisan vote and send this bill to the House as soon as
possible. I urge my colleagues to support this bill, and let's not wait
until the end of the year to extend this critical program.
With that, I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CRAPO. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CRAPO. Mr. President, as we near the votes on this bill, I wish
to take one more opportunity to speak in favor of the TRIA
reauthorization legislation.
Again, I thank Senators Schumer, Heller, and Kirk and their staffs
and Senator Reed for all their hard work in bringing forward this
legislation.
I also thank Chairman Johnson and his staff for moving forward so
quickly and aggressively on this legislation. Together, we were able to
put together a bill that allows the program to continue to function
while increasing the movement toward ultimate taxpayer protection.
As I mentioned before, we were able to approve this bill out of
committee with a 22-to-0 unanimous vote. The agreement of all the
members of the banking committee that we should move this bill forward
speaks to the importance of this critical legislation and to the level
of the added taxpayer protections we were able to build into it.
Our bill increases the level of losses that the private sector will
absorb before reaching the Federal backstop. We do that by increasing
the coinsurance level of any company participating in TRIA so that each
company will shoulder a greater percentage of the losses. We also
increase by $10 billion the level of mandatory post-event recoupments
to $37.5 billion, which means that the taxpayer will ultimately recover
all TRIA losses except in the most extreme events.
This bill will continue a program that reduces our economic
vulnerability to terrorism, and I encourage my colleagues to support
it.
One last time, I thank Senator Johnson and Senator Schumer for their
strong support and for our ability to work together and break the mold,
if you will, by having a bipartisan movement forward on this important
and critical legislation.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from New York.
Mr. SCHUMER. Once again I thank the chair and the ranking member of
the banking committee, Tim Johnson and Mike Crapo, for their great
work.
I say to my colleagues, this is a very good example of much
cooperation--bipartisan cooperation, Democrat and Republican--a 22-to-0
unanimous vote out of the committee. It is also cooperation between
private industry and the government. Industry, insurance, and others
knew they had to shoulder a greater share of the load as we move on
after 9/11 but that only government could be the backstop at the end of
the day.
Again, this is an economic development issue above anything else. It
is not out of whose pocket what money comes. If the greatest problem
America faces is good-paying jobs--well, if we were not to renew
terrorism insurance, we would lose many good-paying jobs.
This amendment will allow those jobs to continue and grow. People
will
[[Page S4588]]
not build major edifices, major complexes--whether they be skyscrapers
in Chicago or New York, whether they be football stadiums in Idaho or
South Carolina or major shopping centers in South Dakota--unless they
know there is a backstop, because insurers will not insure if they
think terrorism could just totally wipe them out. And that means we
wouldn't get financing for these projects.
It is an outstanding piece of legislation. My hope, in conclusion, is
that the House would pass our bill. We know there are some concerns in
the House, but there is a bipartisan coalition of Democrats and
Republicans who really favor the approach we have taken. I know there
are some in the House who don't believe government should be involved
here, but that is, with all due respect, a purist view.
We have cut back on some of the government's obligations. Mike Crapo
and many of our colleagues from the other side of the aisle made that
happen. But at the same time, without the government backstop, we would
do real harm to our economy.
I hope we can get a very large vote in the Senate--bipartisan--
because if we do, it should importune the House to perhaps pass our
legislation.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. SCHUMER. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Mr. President, I wish to make a couple points on the
Coburn amendment, and then I will raise a point of order.
The current bill, S. 2244, is budget neutral, as the past TRIA bills
have been. On the other hand, CBO has said Senator Coburn's amendment
is not fully paid for, violating the Senate's PAYGO rule.
Basically, the amendment--even though I know the sponsor does not
intend it that way--is a killer amendment. CBO has said the amendment
would cause S. 2244 to increase the Federal deficit in both the 5-year
and 10-year budget windows.
Senator Coburn offered this amendment in committee. It was roundly
defeated by a bipartisan vote of 16 to 6 against it.
I appreciate Senator Coburn's effort to provide more flexibility to
the timeframe for recoupment by the government in case of a terrorist
attack, but in fact the banking committee, led by Senator Johnson, and
my office have worked with CBO for a number of months to determine
whether there could be more flexibility in the recoupment process.
Unfortunately, CBO has yet to identify a way to provide more
flexibility in the recoupment period while still ensuring the program
remains budget neutral as it is now.
It is also important to note that if recoupment by the government
poses any unforeseen challenge after a future attack, nothing would
stop the Treasury Secretary from asking the Congress then to provide
that flexibility.
The bottom line is that TRIA is too important to allow this amendment
and nonreauthorization of the program because it is not budget neutral.
We don't want to give anybody an excuse.
I am hopeful Senator Coburn will support TRIA's final passage, even
if his amendment isn't agreed to, as he did in committee. But for those
of us whose priority is to reauthorize this program, I urge my
colleagues to vote to sustain the budget point of order and oppose the
amendment.
Mr. President, I raise a point of order that the pending amendment
violates section 201 of S. Con. Res. 21, the concurrent resolution on
the budget for the fiscal year 2008.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. CRAPO. Mr. President, pursuant to section 904 of the
Congressional Budget Act of 1974 and the waiver provisions of
applicable budget resolutions, I move to waive all applicable sections
of that act and applicable budget resolutions for purposes of the
pending amendment, and I ask for the yeas and nays.
The PRESIDING OFFICER (Mr. King). Is there a sufficient second?
There appears to be a sufficient second.
All debate time is expired.
The question is on agreeing to the motion.
The clerk will call the roll.
The bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from Delaware (Mr. Coons) and
the Senator from Hawaii (Mr. Schatz) are necessarily absent.
Mr. CORNYN. The following Senator is necessarily absent: the Senator
from Tennessee (Mr. Alexander).
Further, if present and voting, the Senator from Tennessee (Mr.
Alexander) would have voted ``yea.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The yeas and nays resulted--yeas 48, nays 49, as follows:
[Rollcall Vote No. 229 Leg.]
YEAS--48
Ayotte
Barrasso
Blunt
Boozman
Burr
Chambliss
Coats
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
Cruz
Enzi
Fischer
Flake
Graham
Grassley
Hatch
Heller
Hoeven
Inhofe
Isakson
Johanns
Johnson (WI)
Kirk
Lee
Manchin
McCain
McConnell
Moran
Murkowski
Paul
Portman
Risch
Roberts
Rubio
Scott
Sessions
Shaheen
Shelby
Thune
Toomey
Udall (CO)
Vitter
Warner
Wicker
NAYS--49
Baldwin
Begich
Bennet
Blumenthal
Booker
Boxer
Brown
Cantwell
Cardin
Carper
Casey
Donnelly
Durbin
Feinstein
Franken
Gillibrand
Hagan
Harkin
Heinrich
Heitkamp
Hirono
Johnson (SD)
Kaine
King
Klobuchar
Landrieu
Leahy
Levin
Markey
McCaskill
Menendez
Merkley
Mikulski
Murphy
Murray
Nelson
Pryor
Reed
Reid
Rockefeller
Sanders
Schumer
Stabenow
Tester
Udall (NM)
Walsh
Warren
Whitehouse
Wyden
NOT VOTING--3
Alexander
Coons
Schatz
The PRESIDING OFFICER. On this vote, the yeas are 48 and the nays are
49. Three-fifths of the Senators duly chosen and sworn not having voted
in the affirmative, the motion is rejected and the amendment falls.
Change of Vote
Mr. WARNER. Mr. President, on rollcall vote No. 229, I was present
and voted aye. The official record has me listed as absent. Therefore,
I ask unanimous consent that the official record be corrected to
accurately reflect my vote. This will in no way change the outcome of
the vote.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The foregoing tally has been changed to reflect the above order.)
Vote on Amendment No. 3550
The PRESIDING OFFICER. Under the previous order, there will be 2
minutes of debate prior to a vote in relation to Vitter amendment No.
3550.
Mr. SCHUMER. Mr. President, I yield back all time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. I ask for a voice vote.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 3550) was agreed to.
The PRESIDING OFFICER. Under the previous order, there will be 2
minutes of debate prior to a vote in relation to Flake amendment No.
3551.
The PRESIDING OFFICER. The Senator from New York.
Mr. SCHUMER. This is a good amendment and will be supported by
Chairman Johnson and myself.
I yield back all time.
Mr. McCAIN. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The assistant bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from Delaware (Mr. Coons) and
the Senator from Hawaii (Mr. Schatz) are necessarily absent.
Mr. CORNYN. The following Senator is necessarily absent: the Senator
from Tennessee (Mr. Alexander).
[[Page S4589]]
Further, if present and voting, the Senator from Tennessee (Mr.
Alexander) would have voted ``yea.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 97, nays 0, as follows:
[Rollcall Vote No. 230 Leg.]
YEAS--97
Ayotte
Baldwin
Barrasso
Begich
Bennet
Blumenthal
Blunt
Booker
Boozman
Boxer
Brown
Burr
Cantwell
Cardin
Carper
Casey
Chambliss
Coats
Coburn
Cochran
Collins
Corker
Cornyn
Crapo
Cruz
Donnelly
Durbin
Enzi
Feinstein
Fischer
Flake
Franken
Gillibrand
Graham
Grassley
Hagan
Harkin
Hatch
Heinrich
Heitkamp
Heller
Hirono
Hoeven
Inhofe
Isakson
Johanns
Johnson (SD)
Johnson (WI)
Kaine
King
Kirk
Klobuchar
Landrieu
Leahy
Lee
Levin
Manchin
Markey
McCain
McCaskill
McConnell
Menendez
Merkley
Mikulski
Moran
Murkowski
Murphy
Murray
Nelson
Paul
Portman
Pryor
Reed
Reid
Risch
Roberts
Rockefeller
Rubio
Sanders
Schumer
Scott
Sessions
Shaheen
Shelby
Stabenow
Tester
Thune
Toomey
Udall (CO)
Udall (NM)
Vitter
Walsh
Warner
Warren
Whitehouse
Wicker
Wyden
NOT VOTING--3
Alexander
Coons
Schatz
The amendment (No. 3551) was agreed to.
Vote on Amendment No. 3552
The PRESIDING OFFICER. Under the previous order, there will be 2
minutes of debate prior to a vote in relation to the Tester amendment
No. 3552.
The Senator from New York.
Mr. SCHUMER. I yield back all time.
The PRESIDING OFFICER. All time is yielded back.
The question is on agreeing to Tester amendment No. 3552.
The amendment was agreed to.
The bill was ordered to be engrossed for a third reading and was read
the third time.
The PRESIDING OFFICER. Under the previous order, there will be 2
minutes of debate equally divided prior to a vote on the passage of the
bill.
Mr. SCHUMER. Mr. President, I yield back all time and ask for the
yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
Thre is a sufficient second.
The bill having been read the third time, the question is, Shall it
pass?
The clerk will call the roll.
The legislative clerk called the roll.
The PRESIDING OFFICER (Ms. Hirono). Are there any other Senators in
the Chamber desiring to vote?
Mr. DURBIN. I announce that the Senator from Delaware (Mr. Coons) and
the Senator from Hawaii (Mr. Schatz) are necessarily absent.
Mr. CORNYN. The following Senator is necessarily absent: the Senator
from Tennessee (Mr. Alexander).
Further, if present and voting, the Senator from Tennessee (Mr.
Alexander) would have voted ``yea.''
The result was announced--yeas 93, nays 4, as follows:
[Rollcall Vote No. 231 Leg.]
YEAS--93
Ayotte
Baldwin
Barrasso
Begich
Bennet
Blumenthal
Blunt
Booker
Boozman
Boxer
Brown
Burr
Cantwell
Cardin
Carper
Casey
Chambliss
Coats
Cochran
Collins
Corker
Cornyn
Crapo
Cruz
Donnelly
Durbin
Enzi
Feinstein
Fischer
Flake
Franken
Gillibrand
Graham
Grassley
Hagan
Harkin
Hatch
Heinrich
Heitkamp
Heller
Hirono
Hoeven
Inhofe
Isakson
Johanns
Johnson (SD)
Johnson (WI)
Kaine
King
Kirk
Klobuchar
Landrieu
Leahy
Lee
Levin
Manchin
Markey
McCain
McCaskill
McConnell
Menendez
Merkley
Mikulski
Moran
Murkowski
Murphy
Murray
Nelson
Paul
Portman
Pryor
Reed
Reid
Risch
Rockefeller
Sanders
Schumer
Scott
Shaheen
Shelby
Stabenow
Tester
Thune
Toomey
Udall (CO)
Udall (NM)
Vitter
Walsh
Warner
Warren
Whitehouse
Wicker
Wyden
NAYS--4
Coburn
Roberts
Rubio
Sessions
NOT VOTING--3
Alexander
Coons
Schatz
The bill (S. 2244), as amended, was passed, as follows:
S. 2244
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 ``Terrorism Risk Insurance
Program Reauthorization Act of 2014''.
SEC. 2. EXTENSION OF TERRORISM INSURANCE PROGRAM.
Section 108(a) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) is amended by striking ``December 31,
2014'' and inserting ``December 31, 2021''.
SEC. 3. FEDERAL SHARE.
Section 103(e)(1)(A) of the Terrorism Risk Insurance Act of
2002 (15 U.S.C. 6701 note) is amended by inserting ``and
beginning on January 1, 2016, shall decrease by 1 percentage
point per calendar year until equal to 80 percent'' after
``85 percent''.
SEC. 4. RECOUPMENT OF FEDERAL SHARE OF COMPENSATION UNDER THE
PROGRAM.
Section 103(e) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note) is amended--
(1) in paragraph (6), in the matter preceding subparagraph
(A), by striking ``shall be'' and all that follows through
subparagraph (E) and inserting ``shall be the lesser of--
``(A) $27,500,000,000, as such amount is adjusted pursuant
to this paragraph; and
``(B) the aggregate amount, for all insurers, of insured
losses during such calendar year,
provided that beginning in the calendar year that follows the
date of enactment of the Terrorism Risk Insurance Program
Reauthorization Act of 2014, the amount set forth under
subparagraph (A) shall increase by $2,000,000,000 per
calendar year until equal to $37,500,000,000.'';
(2) in paragraph (7)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i), by striking ``for
each of the periods referred to in subparagraphs (A) through
(E) of paragraph (6)''; and
(ii) in clause (i), by striking ``for such period'';
(B) by striking subparagraph (B) and inserting the
following:
``(B) [Reserved.]'';
(C) in subparagraph (C)--
(i) by striking ``occurring during any of the periods
referred to in any of subparagraphs (A) through (E) of
paragraph (6), terrorism loss risk-spreading premiums in an
amount equal to 133 percent'' and inserting ``, terrorism
loss risk-spreading premiums in an amount equal to 135.5
percent''; and
(ii) by inserting ``as calculated under subparagraph (A)''
after ``mandatory recoupment amount''; and
(D) in subparagraph (E)(i)--
(i) in subclause (I)--
(I) by striking ``2010'' and inserting ``2017''; and
(II) by striking ``2012'' and inserting ``2019'';
(ii) in subclause (II)--
(I) by striking ``2011'' and inserting ``2018'';
(II) by striking ``2012'' and inserting ``2019''; and
(III) by striking ``2017'' and inserting ``2024''; and
(iii) in subclause (III)--
(I) by striking ``2012'' and inserting ``2019''; and
(II) by striking ``2017'' and inserting ``2024''.
SEC. 5. TECHNICAL AMENDMENTS.
The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) is amended--
(1) in section 102--
(A) in paragraph (3)--
(i) by redesignating subparagraphs (A), (B), and (C) as
clauses (i), (ii), and (iii), respectively;
(ii) in the matter preceding clause (i) (as so
redesignated), by striking ``An entity has'' and inserting
the following:
``(A) In general.--An entity has''; and
(iii) by adding at the end the following new subparagraph:
``(B) Rule of construction.--An entity, including any
affiliate thereof, does not have `control' over another
entity, if, as of the date of enactment of the Terrorism Risk
Insurance Program Reauthorization Act of 2014, the entity is
acting as an attorney-in-fact, as defined by the Secretary,
for the other entity and such other entity is a reciprocal
insurer, provided that the entity is not, for reasons other
than the attorney-in-fact relationship, defined as having
`control' under subparagraph (A).'';
(B) in paragraph (7)--
(i) by striking subparagraphs (A) through (F) and inserting
the following:
``(A) the value of an insurer's direct earned premiums
during the immediately preceding calendar year, multiplied by
20 percent; and'';
(ii) by redesignating subparagraph (G) as subparagraph (B);
and
(iii) in subparagraph (B), as so redesignated by clause
(ii)--
(I) by striking ``notwithstanding subparagraphs (A) through
(F), for the Transition Period or any Program Year'' and
inserting ``notwithstanding subparagraph (A), for any
calendar year''; and
(II) by striking ``Period or Program Year'' and inserting
``calendar year'';
(C) by striking paragraph (11); and
(D) by redesignating paragraphs (12) through (16) as
paragraphs (11) through (15), respectively; and
[[Page S4590]]
(2) in section 103--
(A) in subsection (c), by striking ``Program Year'' and
inserting ``calendar year'';
(B) in subsection (e)--
(i) in paragraph (1)--
(I) in subparagraph (A), as previously amended by section
3--
(aa) by striking ``the Transition Period and each Program
Year through Program Year 4 shall be equal to 90 percent, and
during Program Year 5 and each Program Year thereafter'' and
inserting ``each calendar year'';
(bb) by striking the comma after ``80 percent''; and
(cc) by striking ``such Transition Period or such Program
Year'' and inserting ``such calendar year''; and
(II) in subparagraph (B), by striking ``exceed'' and all
that follows through clause (ii) and inserting ``exceed
$100,000,000 with respect to such insured losses occurring in
the calendar year.'';
(ii) in paragraph (2)(A), by striking ``the period
beginning on the first day of the Transition Period and
ending on the last day of Program Year 1, or during any
Program Year thereafter'' and inserting ``a calendar year'';
and
(iii) in paragraph (3), by striking ``the period beginning
on the first day of the Transition Period and ending on the
last day of Program Year 1, or during any other Program
Year'' and inserting ``any calendar year''; and
(C) in subsection (g)(2)--
(i) by striking ``the Transition Period or a Program Year''
each place that term appears and inserting ``the calendar
year'';
(ii) by striking ``such period'' and inserting ``the
calendar year''; and
(iii) by striking ``that period'' and inserting ``the
calendar year''.
SEC. 6. IMPROVING THE CERTIFICATION PROCESS.
(a) Definitions.--As used in this section--
(1) the term ``act of terrorism'' has the same meaning as
in section 102(1) of the Terrorism Risk Insurance Act of 2002
(15 U.S.C. 6701 note);
(2) the term ``certification process'' means the process by
which the Secretary determines whether to certify an act as
an act of terrorism under section 102(1) of the Terrorism
Risk Insurance Act of 2002 (15 U.S.C. 6701 note); and
(3) the term ``Secretary'' means the Secretary of the
Treasury.
(b) Study.--Not later than 9 months after the date of
enactment of this Act, the Secretary shall conduct and
complete a study on the certification process.
(c) Required Content.--The study required under subsection
(a) shall include an examination and analysis of--
(1) the establishment of a reasonable timeline by which the
Secretary must make an accurate determination on whether to
certify an act as an act of terrorism;
(2) the impact that the length of any timeline proposed to
be established under paragraph (1) may have on the insurance
industry, policyholders, consumers, and taxpayers as a whole;
(3) the factors the Secretary would evaluate and monitor
during the certification process, including the ability of
the Secretary to obtain the required information regarding
the amount of projected and incurred losses resulting from an
act which the Secretary would need in determining whether to
certify the act as an act of terrorism;
(4) the appropriateness, efficiency, and effectiveness of
the consultation process required under section 102(1)(A) of
the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701
note) and any recommendations on changes to the consultation
process; and
(5) the ability of the Secretary to provide guidance and
updates to the public regarding any act that may reasonably
be certified as an act of terrorism.
(d) Report.--Upon completion of the study required under
subsection (a), the Secretary shall submit a report on the
results of such study to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(e) Rulemaking.--Section 102(1) of the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
(1) by redesignating subparagraph (D) as subparagraph (E);
and
(2) by inserting after subparagraph (C) the following:
``(D) Timing of certification.--Not later than 9 months
after the report required under section 6 of the Terrorism
Risk Insurance Program Reauthorization Act of 2014 is
submitted to the appropriate committees of Congress, the
Secretary shall issue final rules governing the certification
process, including any timeline applicable to any
certification by the Secretary on whether an act is an act of
terrorism under this paragraph.''.
SEC. 7. GAO STUDY ON UPFRONT PREMIUMS.
(a) Study.--Not later than 2 years after the date of
enactment of this Act, the Comptroller General of the United
States shall complete a study on the viability and effects of
the Federal Government assessing and collecting upfront
premiums on insurers that participate in the Terrorism
Insurance Program established under the Terrorism Risk
Insurance Act of 2002 (15 U.S.C. 6701 note) (hereafter in
this section referred to as the ``Program'').
(b) Required Content.--The study required under subsection
(a) shall examine, but shall not be limited to, the following
issues:
(1) How the Federal Government could determine the price of
such upfront premiums on insurers that participate in the
Program.
(2) How the Federal Government could collect and manage
such upfront premiums.
(3) How the Federal Government could ensure that such
upfront premiums are not spent for purposes other than claims
through the Program.
(4) How the assessment and collection of such upfront
premiums could affect take-up rates for terrorism risk
coverage in different regions and industries and how it could
impact small businesses and consumers in both metropolitan
and non-metropolitan areas.
(5) The effect of collecting such upfront premiums on
insurers both large and small.
(6) The effect of collecting such upfront premiums on the
private market for terrorism risk reinsurance.
(7) The size of any Federal Government subsidy insurers may
receive through their participation in the Program, taking
into account the Program's current post-event recoupment
structure.
(c) Report.--Upon completion of the study required under
subsection (a), the Comptroller General shall submit a report
on the results of such study to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(d) Public Availability.--The study and report required
under this section shall be made available to the public in
electronic form and shall be published on the website of the
Government Accountability Office.
SEC. 8. MEMBERSHIP OF BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM.
(a) In General.--The first undesignated paragraph of
section 10 of the Federal Reserve Act (12 U.S.C. 241) is
amended by inserting after the second sentence the following:
``In selecting members of the Board, the President shall
appoint at least 1 member with demonstrated primary
experience working in or supervising community banks having
less than $10,000,000,000 in total assets.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of enactment of this Act and
apply to appointments made on and after that effective date,
excluding any nomination pending in the Senate on that date.
SEC. 9. ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS.
(a) Finding; Rule of Construction.--
(1) Finding.--Congress finds that it is desirable to
encourage the growth of nongovernmental, private market
reinsurance capacity for protection against losses arising
from acts of terrorism.
(2) Rule of construction.--Nothing in this Act, any
amendment made by this Act, or the Terrorism Risk Insurance
Act of 2002 (15 U.S.C. 6701 note) shall prohibit insurers
from developing risk-sharing mechanisms to voluntarily
reinsure terrorism losses between and among themselves.
(b) Advisory Committee on Risk-Sharing Mechanisms.--
(1) Establishment.--The Secretary of the Treasury shall
establish and appoint an advisory committee to be known as
the ``Advisory Committee on Risk-Sharing Mechanisms''
(referred to in this subsection as the ``Advisory
Committee'').
(2) Duties.--The Advisory Committee shall provide advice,
recommendations, and encouragement with respect to the
creation and development of the nongovernmental risk-sharing
mechanisms described under subsection (a).
(3) Membership.--The Advisory Committee shall be composed
of 9 members who are directors, officers, or other employees
of insurers, reinsurers, or capital market participants that
are participating or that desire to participate in the
nongovernmental risk-sharing mechanisms described under
subsection (a), and who are representative of the affected
sectors of the insurance industry, including commercial
property insurance, commercial casualty insurance,
reinsurance, and alternative risk transfer industries.
(c) Effective Date.--The provisions of this section shall
take effect on January 1, 2015.
TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS
SEC. 201. SHORT TITLE.
This title may be cited as the ``National Association of
Registered Agents and Brokers Reform Act of 2014''.
SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF
REGISTERED AGENTS AND BROKERS.
(a) In General.--Subtitle C of title III of the Gramm-
Leach-Bliley Act (15 U.S.C. 6751 et seq.) is amended to read
as follows:
``Subtitle C--National Association of Registered Agents and Brokers
``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND
BROKERS.
``(a) Establishment.--There is established the National
Association of Registered Agents and Brokers (referred to in
this subtitle as the `Association').
``(b) Status.--The Association shall--
``(1) be a nonprofit corporation;
``(2) not be an agent or instrumentality of the Federal
Government;
``(3) be an independent organization that may not be merged
with or into any other private or public entity; and
``(4) except as otherwise provided in this subtitle, be
subject to, and have all the powers conferred upon, a
nonprofit corporation
[[Page S4591]]
by the District of Columbia Nonprofit Corporation Act (D.C.
Code, sec. 29-301.01 et seq.) or any successor thereto.
``SEC. 322. PURPOSE.
``The purpose of the Association shall be to provide a
mechanism through which licensing, continuing education, and
other nonresident insurance producer qualification
requirements and conditions may be adopted and applied on a
multi-state basis without affecting the laws, rules, and
regulations, and preserving the rights of a State, pertaining
to--
``(1) licensing, continuing education, and other
qualification requirements of insurance producers that are
not members of the Association;
``(2) resident or nonresident insurance producer
appointment requirements;
``(3) supervising and disciplining resident and nonresident
insurance producers;
``(4) establishing licensing fees for resident and
nonresident insurance producers so that there is no loss of
insurance producer licensing revenue to the State; and
``(5) prescribing and enforcing laws and regulations
regulating the conduct of resident and nonresident insurance
producers.
``SEC. 323. MEMBERSHIP.
``(a) Eligibility.--
``(1) In general.--Any insurance producer licensed in its
home State shall, subject to paragraphs (2) and (4), be
eligible to become a member of the Association.
``(2) Ineligibility for suspension or revocation of
license.--Subject to paragraph (3), an insurance producer is
not eligible to become a member of the Association if a State
insurance regulator has suspended or revoked the insurance
license of the insurance producer in that State.
``(3) Resumption of eligibility.--Paragraph (2) shall cease
to apply to any insurance producer if--
``(A) the State insurance regulator reissues or renews the
license of the insurance producer in the State in which the
license was suspended or revoked, or otherwise terminates or
vacates the suspension or revocation; or
``(B) the suspension or revocation expires or is
subsequently overturned by a court of competent jurisdiction.
``(4) Criminal history record check required.--
``(A) In general.--An insurance producer who is an
individual shall not be eligible to become a member of the
Association unless the insurance producer has undergone a
criminal history record check that complies with regulations
prescribed by the Attorney General of the United States under
subparagraph (K).
``(B) Criminal history record check requested by home
state.--An insurance producer who is licensed in a State and
who has undergone a criminal history record check during the
2-year period preceding the date of submission of an
application to become a member of the Association, in
compliance with a requirement to undergo such criminal
history record check as a condition for such licensure in the
State, shall be deemed to have undergone a criminal history
record check for purposes of subparagraph (A).
``(C) Criminal history record check requested by
association.--
``(i) In general.--The Association shall, upon request by
an insurance producer licensed in a State, submit
fingerprints or other identification information obtained
from the insurance producer, and a request for a criminal
history record check of the insurance producer, to the
Federal Bureau of Investigation.
``(ii) Procedures.--The board of directors of the
Association (referred to in this subtitle as the `Board')
shall prescribe procedures for obtaining and utilizing
fingerprints or other identification information and criminal
history record information, including the establishment of
reasonable fees to defray the expenses of the Association in
connection with the performance of a criminal history record
check and appropriate safeguards for maintaining
confidentiality and security of the information. Any fees
charged pursuant to this clause shall be separate and
distinct from those charged by the Attorney General pursuant
to subparagraph (I).
``(D) Form of request.--A submission under subparagraph
(C)(i) shall include such fingerprints or other
identification information as is required by the Attorney
General concerning the person about whom the criminal history
record check is requested, and a statement signed by the
person authorizing the Attorney General to provide the
information to the Association and for the Association to
receive the information.
``(E) Provision of information by attorney general.--Upon
receiving a submission under subparagraph (C)(i) from the
Association, the Attorney General shall search all criminal
history records of the Federal Bureau of Investigation,
including records of the Criminal Justice Information
Services Division of the Federal Bureau of Investigation,
that the Attorney General determines appropriate for criminal
history records corresponding to the fingerprints or other
identification information provided under subparagraph (D)
and provide all criminal history record information included
in the request to the Association.
``(F) Limitation on permissible uses of information.--Any
information provided to the Association under subparagraph
(E) may only--
``(i) be used for purposes of determining compliance with
membership criteria established by the Association;
``(ii) be disclosed to State insurance regulators, or
Federal or State law enforcement agencies, in conformance
with applicable law; or
``(iii) be disclosed, upon request, to the insurance
producer to whom the criminal history record information
relates.
``(G) Penalty for improper use or disclosure.--Whoever
knowingly uses any information provided under subparagraph
(E) for a purpose not authorized in subparagraph (F), or
discloses any such information to anyone not authorized to
receive it, shall be fined not more than $50,000 per
violation as determined by a court of competent jurisdiction.
``(H) Reliance on information.--Neither the Association nor
any of its Board members, officers, or employees shall be
liable in any action for using information provided under
subparagraph (E) as permitted under subparagraph (F) in good
faith and in reasonable reliance on its accuracy.
``(I) Fees.--The Attorney General may charge a reasonable
fee for conducting the search and providing the information
under subparagraph (E), and any such fee shall be collected
and remitted by the Association to the Attorney General.
``(J) Rule of construction.--Nothing in this paragraph
shall be construed as--
``(i) requiring a State insurance regulator to perform
criminal history record checks under this section; or
``(ii) limiting any other authority that allows access to
criminal history records.
``(K) Regulations.--The Attorney General shall prescribe
regulations to carry out this paragraph, which shall
include--
``(i) appropriate protections for ensuring the
confidentiality of information provided under subparagraph
(E); and
``(ii) procedures providing a reasonable opportunity for an
insurance producer to contest the accuracy of information
regarding the insurance producer provided under subparagraph
(E).
``(L) Ineligibility for membership.--
``(i) In general.--The Association may, under reasonably
consistently applied standards, deny membership to an
insurance producer on the basis of criminal history record
information provided under subparagraph (E), or where the
insurance producer has been subject to disciplinary action,
as described in paragraph (2).
``(ii) Rights of applicants denied membership.--The
Association shall notify any insurance producer who is denied
membership on the basis of criminal history record
information provided under subparagraph (E) of the right of
the insurance producer to--
``(I) obtain a copy of all criminal history record
information provided to the Association under subparagraph
(E) with respect to the insurance producer; and
``(II) challenge the denial of membership based on the
accuracy and completeness of the information.
``(M) Definition.--For purposes of this paragraph, the term
`criminal history record check' means a national background
check of criminal history records of the Federal Bureau of
Investigation.
``(b) Authority To Establish Membership Criteria.--The
Association may establish membership criteria that bear a
reasonable relationship to the purposes for which the
Association was established.
``(c) Establishment of Classes and Categories of
Membership.--
``(1) Classes of membership.--The Association may establish
separate classes of membership, with separate criteria, if
the Association reasonably determines that performance of
different duties requires different levels of education,
training, experience, or other qualifications.
``(2) Business entities.--The Association shall establish a
class of membership and membership criteria for business
entities. A business entity that applies for membership shall
be required to designate an individual Association member
responsible for the compliance of the business entity with
Association standards and the insurance laws, rules, and
regulations of any State in which the business entity seeks
to do business on the basis of Association membership.
``(3) Categories.--
``(A) Separate categories for insurance producers
permitted.--The Association may establish separate categories
of membership for insurance producers and for other persons
or entities within each class, based on the types of
licensing categories that exist under State laws.
``(B) Separate treatment for depository institutions
prohibited.--No special categories of membership, and no
distinct membership criteria, shall be established for
members that are depository institutions or for employees,
agents, or affiliates of depository institutions.
``(d) Membership Criteria.--
``(1) In general.--The Association may establish criteria
for membership which shall include standards for personal
qualifications, education, training, and experience. The
Association shall not establish criteria that unfairly limit
the ability of a small insurance producer to become a member
of the Association, including imposing discriminatory
membership fees.
``(2) Qualifications.--In establishing criteria under
paragraph (1), the Association shall not adopt any
qualification less protective to the public than that
contained in the National Association of Insurance
Commissioners (referred to in this subtitle as the
[[Page S4592]]
`NAIC') Producer Licensing Model Act in effect as of the date
of enactment of the National Association of Registered Agents
and Brokers Reform Act of 2014, and shall consider the
highest levels of insurance producer qualifications
established under the licensing laws of the States.
``(3) Assistance from states.--
``(A) In general.--The Association may request a State to
provide assistance in investigating and evaluating the
eligibility of a prospective member for membership in the
Association.
``(B) Authorization of information sharing.--A submission
under subsection (a)(4)(C)(i) made by an insurance producer
licensed in a State shall include a statement signed by the
person about whom the assistance is requested authorizing--
``(i) the State to share information with the Association;
and
``(ii) the Association to receive the information.
``(C) Rule of construction.--Subparagraph (A) shall not be
construed as requiring or authorizing any State to adopt new
or additional requirements concerning the licensing or
evaluation of insurance producers.
``(4) Denial of membership.--The Association may, based on
reasonably consistently applied standards, deny membership to
any State-licensed insurance producer for failure to meet the
membership criteria established by the Association.
``(e) Effect of Membership.--
``(1) Authority of association members.--Membership in the
Association shall--
``(A) authorize an insurance producer to sell, solicit, or
negotiate insurance in any State for which the member pays
the licensing fee set by the State for any line or lines of
insurance specified in the home State license of the
insurance producer, and exercise all such incidental powers
as shall be necessary to carry out such activities, including
claims adjustments and settlement to the extent permissible
under the laws of the State, risk management, employee
benefits advice, retirement planning, and any other
insurance-related consulting activities;
``(B) be the equivalent of a nonresident insurance producer
license for purposes of authorizing the insurance producer to
engage in the activities described in subparagraph (A) in any
State where the member pays the licensing fee; and
``(C) be the equivalent of a nonresident insurance producer
license for the purpose of subjecting an insurance producer
to all laws, regulations, provisions or other action of any
State concerning revocation, suspension, or other enforcement
action related to the ability of a member to engage in any
activity within the scope of authority granted under this
subsection and to all State laws, regulations, provisions,
and actions preserved under paragraph (5).
``(2) Violent crime control and law enforcement act of
1994.--Nothing in this subtitle shall be construed to alter,
modify, or supercede any requirement established by section
1033 of title 18, United States Code.
``(3) Agent for remitting fees.--The Association shall act
as an agent for any member for purposes of remitting
licensing fees to any State pursuant to paragraph (1).
``(4) Notification of action.--
``(A) In general.--The Association shall notify the States
(including State insurance regulators) and the NAIC when an
insurance producer has satisfied the membership criteria of
this section. The States (including State insurance
regulators) shall have 10 business days after the date of the
notification in order to provide the Association with
evidence that the insurance producer does not satisfy the
criteria for membership in the Association.
``(B) Ongoing disclosures required.--On an ongoing basis,
the Association shall disclose to the States (including State
insurance regulators) and the NAIC a list of the States in
which each member is authorized to operate. The Association
shall immediately notify the States (including State
insurance regulators) and the NAIC when a member is newly
authorized to operate in one or more States, or is no longer
authorized to operate in one or more States on the basis of
Association membership.
``(5) Preservation of consumer protection and market
conduct regulation.--
``(A) In general.--No provision of this section shall be
construed as altering or affecting the applicability or
continuing effectiveness of any law, regulation, provision,
or other action of any State, including those described in
subparagraph (B), to the extent that the State law,
regulation, provision, or other action is not inconsistent
with the provisions of this subtitle related to market entry
for nonresident insurance producers, and then only to the
extent of the inconsistency.
``(B) Preserved regulations.--The laws, regulations,
provisions, or other actions of any State referred to in
subparagraph (A) include laws, regulations, provisions, or
other actions that--
``(i) regulate market conduct, insurance producer conduct,
or unfair trade practices;
``(ii) establish consumer protections; or
``(iii) require insurance producers to be appointed by a
licensed or authorized insurer.
``(f) Biennial Renewal.--Membership in the Association
shall be renewed on a biennial basis.
``(g) Continuing Education.--
``(1) In general.--The Association shall establish, as a
condition of membership, continuing education requirements
which shall be comparable to the continuing education
requirements under the licensing laws of a majority of the
States.
``(2) State continuing education requirements.--A member
may not be required to satisfy continuing education
requirements imposed under the laws, regulations, provisions,
or actions of any State other than the home State of the
member.
``(3) Reciprocity.--The Association shall not require a
member to satisfy continuing education requirements that are
equivalent to any continuing education requirements of the
home State of the member that have been satisfied by the
member during the applicable licensing period.
``(4) Limitation on the association.--The Association shall
not directly or indirectly offer any continuing education
courses for insurance producers.
``(h) Probation, Suspension and Revocation.--
``(1) Disciplinary action.--The Association may place an
insurance producer that is a member of the Association on
probation or suspend or revoke the membership of the
insurance producer in the Association, or assess monetary
fines or penalties, as the Association determines to be
appropriate, if--
``(A) the insurance producer fails to meet the applicable
membership criteria or other standards established by the
Association;
``(B) the insurance producer has been subject to
disciplinary action pursuant to a final adjudicatory
proceeding under the jurisdiction of a State insurance
regulator;
``(C) an insurance license held by the insurance producer
has been suspended or revoked by a State insurance regulator;
or
``(D) the insurance producer has been convicted of a crime
that would have resulted in the denial of membership pursuant
to subsection (a)(4)(L)(i) at the time of application, and
the Association has received a copy of the final disposition
from a court of competent jurisdiction.
``(2) Violations of association standards.--The Association
shall have the power to investigate alleged violations of
Association standards.
``(3) Reporting.--The Association shall immediately notify
the States (including State insurance regulators) and the
NAIC when the membership of an insurance producer has been
placed on probation or has been suspended, revoked, or
otherwise terminated, or when the Association has assessed
monetary fines or penalties.
``(i) Consumer Complaints.--
``(1) In general.--The Association shall--
``(A) refer any complaint against a member of the
Association from a consumer relating to alleged misconduct or
violations of State insurance laws to the State insurance
regulator where the consumer resides and, when appropriate,
to any additional State insurance regulator, as determined by
standards adopted by the Association; and
``(B) make any related records and information available to
each State insurance regulator to whom the complaint is
forwarded.
``(2) Telephone and other access.--The Association shall
maintain a toll-free number for purposes of this subsection
and, as practicable, other alternative means of communication
with consumers, such as an Internet webpage.
``(3) Final disposition of investigation.--State insurance
regulators shall provide the Association with information
regarding the final disposition of a complaint referred
pursuant to paragraph (1)(A), but nothing shall be construed
to compel a State to release confidential investigation
reports or other information protected by State law to the
Association.
``(j) Information Sharing.--The Association may--
``(1) share documents, materials, or other information,
including confidential and privileged documents, with a
State, Federal, or international governmental entity or with
the NAIC or other appropriate entity referenced in paragraphs
(3) and (4), provided that the recipient has the authority
and agrees to maintain the confidentiality or privileged
status of the document, material, or other information;
``(2) limit the sharing of information as required under
this subtitle with the NAIC or any other non-governmental
entity, in circumstances under which the Association
determines that the sharing of such information is
unnecessary to further the purposes of this subtitle;
``(3) establish a central clearinghouse, or utilize the
NAIC or another appropriate entity, as determined by the
Association, as a central clearinghouse, for use by the
Association and the States (including State insurance
regulators), through which members of the Association may
disclose their intent to operate in 1 or more States and pay
the licensing fees to the appropriate States; and
``(4) establish a database, or utilize the NAIC or another
appropriate entity, as determined by the Association, as a
database, for use by the Association and the States
(including State insurance regulators) for the collection of
regulatory information concerning the activities of insurance
producers.
``(k) Effective Date.--The provisions of this section shall
take effect on the later of--
``(1) the expiration of the 2-year period beginning on the
date of enactment of the National Association of Registered
Agents and Brokers Reform Act of 2014; and
``(2) the date of incorporation of the Association.
[[Page S4593]]
``SEC. 324. BOARD OF DIRECTORS.
``(a) Establishment.--There is established a board of
directors of the Association, which shall have authority to
govern and supervise all activities of the Association.
``(b) Powers.--The Board shall have such of the powers and
authority of the Association as may be specified in the
bylaws of the Association.
``(c) Composition.--
``(1) In general.--The Board shall consist of 13 members
who shall be appointed by the President, by and with the
advice and consent of the Senate, in accordance with the
procedures established under Senate Resolution 116 of the
112th Congress, of whom--
``(A) 8 shall be State insurance commissioners appointed in
the manner provided in paragraph (2), 1 of whom shall be
designated by the President to serve as the chairperson of
the Board until the Board elects one such State insurance
commissioner Board member to serve as the chairperson of the
Board;
``(B) 3 shall have demonstrated expertise and experience
with property and casualty insurance producer licensing; and
``(C) 2 shall have demonstrated expertise and experience
with life or health insurance producer licensing.
``(2) State insurance regulator representatives.--
``(A) Recommendations.--Before making any appointments
pursuant to paragraph (1)(A), the President shall request a
list of recommended candidates from the States through the
NAIC, which shall not be binding on the President. If the
NAIC fails to submit a list of recommendations not later than
15 business days after the date of the request, the President
may make the requisite appointments without considering the
views of the NAIC.
``(B) Political affiliation.--Not more than 4 Board members
appointed under paragraph (1)(A) shall belong to the same
political party.
``(C) Former state insurance commissioners.--
``(i) In general.--If, after offering each currently
serving State insurance commissioner an appointment to the
Board, fewer than 8 State insurance commissioners have
accepted appointment to the Board, the President may appoint
the remaining State insurance commissioner Board members, as
required under paragraph (1)(A), of the appropriate political
party as required under subparagraph (B), from among
individuals who are former State insurance commissioners.
``(ii) Limitation.--A former State insurance commissioner
appointed as described in clause (i) may not be employed by
or have any present direct or indirect financial interest in
any insurer, insurance producer, or other entity in the
insurance industry, other than direct or indirect ownership
of, or beneficial interest in, an insurance policy or annuity
contract written or sold by an insurer.
``(D) Service through term.--If a Board member appointed
under paragraph (1)(A) ceases to be a State insurance
commissioner during the term of the Board member, the Board
member shall cease to be a Board member.
``(3) Private sector representatives.--In making any
appointment pursuant to subparagraph (B) or (C) of paragraph
(1), the President may seek recommendations for candidates
from groups representing the category of individuals
described, which shall not be binding on the President.
``(4) State insurance commissioner defined.--For purposes
of this subsection, the term `State insurance commissioner'
means a person who serves in the position in State
government, or on the board, commission, or other body that
is the primary insurance regulatory authority for the State.
``(d) Terms.--
``(1) In general.--Except as provided under paragraph (2),
the term of service for each Board member shall be 2 years.
``(2) Exceptions.--
``(A) 1-year terms.--The term of service shall be 1 year,
as designated by the President at the time of the nomination
of the subject Board members for--
``(i) 4 of the State insurance commissioner Board members
initially appointed under paragraph (1)(A), of whom not more
than 2 shall belong to the same political party;
``(ii) 1 of the Board members initially appointed under
paragraph (1)(B); and
``(iii) 1 of the Board members initially appointed under
paragraph (1)(C).
``(B) Expiration of term.--A Board member may continue to
serve after the expiration of the term to which the Board
member was appointed for the earlier of 2 years or until a
successor is appointed.
``(C) Mid-term appointments.--A Board member appointed to
fill a vacancy occurring before the expiration of the term
for which the predecessor of the Board member was appointed
shall be appointed only for the remainder of that term.
``(3) Successive terms.--Board members may be reappointed
to successive terms.
``(e) Initial Appointments.--The appointment of initial
Board members shall be made no later than 90 days after the
date of enactment of the National Association of Registered
Agents and Brokers Reform Act of 2014.
``(f) Meetings.--
``(1) In general.--The Board shall meet--
``(A) at the call of the chairperson;
``(B) as requested in writing to the chairperson by not
fewer than 5 Board members; or
``(C) as otherwise provided by the bylaws of the
Association.
``(2) Quorum required.--A majority of all Board members
shall constitute a quorum.
``(3) Voting.--Decisions of the Board shall require the
approval of a majority of all Board members present at a
meeting, a quorum being present.
``(4) Initial meeting.--The Board shall hold its first
meeting not later than 45 days after the date on which all
initial Board members have been appointed.
``(g) Restriction on Confidential Information.--Board
members appointed pursuant to subparagraphs (B) and (C) of
subsection (c)(1) shall not have access to confidential
information received by the Association in connection with
complaints, investigations, or disciplinary proceedings
involving insurance producers.
``(h) Ethics and Conflicts of Interest.--The Board shall
issue and enforce an ethical conduct code to address
permissible and prohibited activities of Board members and
Association officers, employees, agents, or consultants. The
code shall, at a minimum, include provisions that prohibit
any Board member or Association officer, employee, agent or
consultant from--
``(1) engaging in unethical conduct in the course of
performing Association duties;
``(2) participating in the making or influencing the making
of any Association decision, the outcome of which the Board
member, officer, employee, agent, or consultant knows or had
reason to know would have a reasonably foreseeable material
financial effect, distinguishable from its effect on the
public generally, on the person or a member of the immediate
family of the person;
``(3) accepting any gift from any person or entity other
than the Association that is given because of the position
held by the person in the Association;
``(4) making political contributions to any person or
entity on behalf of the Association; and
``(5) lobbying or paying a person to lobby on behalf of the
Association.
``(i) Compensation.--
``(1) In general.--Except as provided in paragraph (2), no
Board member may receive any compensation from the
Association or any other person or entity on account of Board
membership.
``(2) Travel expenses and per diem.--Board members may be
reimbursed only by the Association for travel expenses,
including per diem in lieu of subsistence, at rates
consistent with rates authorized for employees of Federal
agencies under subchapter I of chapter 57 of title 5, United
States Code, while away from home or regular places of
business in performance of services for the Association.
``SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY ACTIONS.
``(a) Adoption and Amendment of Bylaws and Standards.--
``(1) Procedures.--The Association shall adopt procedures
for the adoption of bylaws and standards that are similar to
procedures under subchapter II of chapter 5 of title 5,
United States Code (commonly known as the `Administrative
Procedure Act').
``(2) Copy required to be filed.--The Board shall submit to
the President, through the Department of the Treasury, and
the States (including State insurance regulators), and shall
publish on the website of the Association, all proposed
bylaws and standards of the Association, or any proposed
amendment to the bylaws or standards of the Association,
accompanied by a concise general statement of the basis and
purpose of such proposal.
``(3) Effective date.--Any proposed bylaw or standard of
the Association, and any proposed amendment to the bylaws or
standards of the Association, shall take effect, after notice
under paragraph (2) and opportunity for public comment, on
such date as the Association may designate, unless suspended
under section 329(c).
``(4) Rule of construction.--Nothing in this section shall
be construed to subject the Board or the Association to the
requirements of subchapter II of chapter 5 of title 5, United
States Code (commonly known as the `Administrative Procedure
Act').
``(b) Disciplinary Action by the Association.--
``(1) Specification of charges.--In any proceeding to
determine whether membership shall be denied, suspended,
revoked, or not renewed, or to determine whether a member of
the Association should be placed on probation (referred to in
this section as a `disciplinary action') or whether to assess
fines or monetary penalties, the Association shall bring
specific charges, notify the member of the charges, give the
member an opportunity to defend against the charges, and keep
a record.
``(2) Supporting statement.--A determination to take
disciplinary action shall be supported by a statement setting
forth--
``(A) any act or practice in which the member has been
found to have been engaged;
``(B) the specific provision of this subtitle or standard
of the Association that any such act or practice is deemed to
violate; and
``(C) the sanction imposed and the reason for the sanction.
``(3) Ineligibility of private sector representatives.--
Board members appointed pursuant to section 324(c)(3) may
not--
``(A) participate in any disciplinary action or be counted
toward establishing a quorum during a disciplinary action;
and
``(B) have access to confidential information concerning
any disciplinary action.
[[Page S4594]]
``SEC. 326. POWERS.
``In addition to all the powers conferred upon a nonprofit
corporation by the District of Columbia Nonprofit Corporation
Act, the Association shall have the power to--
``(1) establish and collect such membership fees as the
Association finds necessary to impose to cover the costs of
its operations;
``(2) adopt, amend, and repeal bylaws, procedures, or
standards governing the conduct of Association business and
performance of its duties;
``(3) establish procedures for providing notice and
opportunity for comment pursuant to section 325(a);
``(4) enter into and perform such agreements as necessary
to carry out the duties of the Association;
``(5) hire employees, professionals, or specialists, and
elect or appoint officers, and to fix their compensation,
define their duties and give them appropriate authority to
carry out the purposes of this subtitle, and determine their
qualification;
``(6) establish personnel policies of the Association and
programs relating to, among other things, conflicts of
interest, rates of compensation, where applicable, and
qualifications of personnel;
``(7) borrow money; and
``(8) secure funding for such amounts as the Association
determines to be necessary and appropriate to organize and
begin operations of the Association, which shall be treated
as loans to be repaid by the Association with interest at
market rate.
``SEC. 327. REPORT BY THE ASSOCIATION.
``(a) In General.--As soon as practicable after the close
of each fiscal year, the Association shall submit to the
President, through the Department of the Treasury, and the
States (including State insurance regulators), and shall
publish on the website of the Association, a written report
regarding the conduct of its business, and the exercise of
the other rights and powers granted by this subtitle, during
such fiscal year.
``(b) Financial Statements.--Each report submitted under
subsection (a) with respect to any fiscal year shall include
audited financial statements setting forth the financial
position of the Association at the end of such fiscal year
and the results of its operations (including the source and
application of its funds) for such fiscal year.
``SEC. 328. LIABILITY OF THE ASSOCIATION AND THE BOARD
MEMBERS, OFFICERS, AND EMPLOYEES OF THE
ASSOCIATION.
``(a) In General.--The Association shall not be deemed to
be an insurer or insurance producer within the meaning of any
State law, rule, regulation, or order regulating or taxing
insurers, insurance producers, or other entities engaged in
the business of insurance, including provisions imposing
premium taxes, regulating insurer solvency or financial
condition, establishing guaranty funds and levying
assessments, or requiring claims settlement practices.
``(b) Liability of Board Members, Officers, and
Employees.--No Board member, officer, or employee of the
Association shall be personally liable to any person for any
action taken or omitted in good faith in any matter within
the scope of their responsibilities in connection with the
Association.
``SEC. 329. PRESIDENTIAL OVERSIGHT.
``(a) Removal of Board.--If the President determines that
the Association is acting in a manner contrary to the
interests of the public or the purposes of this subtitle or
has failed to perform its duties under this subtitle, the
President may remove the entire existing Board for the
remainder of the term to which the Board members were
appointed and appoint, in accordance with section 324 and
with the advice and consent of the Senate, in accordance with
the procedures established under Senate Resolution 116 of the
112th Congress, new Board members to fill the vacancies on
the Board for the remainder of the terms.
``(b) Removal of Board Member.--The President may remove a
Board member only for neglect of duty or malfeasance in
office.
``(c) Suspension of Bylaws and Standards and Prohibition of
Actions.--Following notice to the Board, the President, or a
person designated by the President for such purpose, may
suspend the effectiveness of any bylaw or standard, or
prohibit any action, of the Association that the President or
the designee determines is contrary to the purposes of this
subtitle.
``SEC. 330. RELATIONSHIP TO STATE LAW.
``(a) Preemption of State Laws.--State laws, regulations,
provisions, or other actions purporting to regulate insurance
producers shall be preempted to the extent provided in
subsection (b).
``(b) Prohibited Actions.--
``(1) In general.--No State shall--
``(A) impede the activities of, take any action against, or
apply any provision of law or regulation arbitrarily or
discriminatorily to, any insurance producer because that
insurance producer or any affiliate plans to become, has
applied to become, or is a member of the Association;
``(B) impose any requirement upon a member of the
Association that it pay fees different from those required to
be paid to that State were it not a member of the
Association; or
``(C) impose any continuing education requirements on any
nonresident insurance producer that is a member of the
Association.
``(2) States other than a home state.--No State, other than
the home State of a member of the Association, shall--
``(A) impose any licensing, personal or corporate
qualifications, education, training, experience, residency,
continuing education, or bonding requirement upon a member of
the Association that is different from the criteria for
membership in the Association or renewal of such membership;
``(B) impose any requirement upon a member of the
Association that it be licensed, registered, or otherwise
qualified to do business or remain in good standing in the
State, including any requirement that the insurance producer
register as a foreign company with the secretary of state or
equivalent State official;
``(C) require that a member of the Association submit to a
criminal history record check as a condition of doing
business in the State; or
``(D) impose any licensing, registration, or appointment
requirements upon a member of the Association, or require a
member of the Association to be authorized to operate as an
insurance producer, in order to sell, solicit, or negotiate
insurance for commercial property and casualty risks to an
insured with risks located in more than one State, if the
member is licensed or otherwise authorized to operate in the
State where the insured maintains its principal place of
business and the contract of insurance insures risks located
in that State.
``(3) Preservation of state disciplinary authority.--
Nothing in this section may be construed to prohibit a State
from investigating and taking appropriate disciplinary
action, including suspension or revocation of authority of an
insurance producer to do business in a State, in accordance
with State law and that is not inconsistent with the
provisions of this section, against a member of the
Association as a result of a complaint or for any alleged
activity, regardless of whether the activity occurred before
or after the insurance producer commenced doing business in
the State pursuant to Association membership.
``SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY REGULATORY
AUTHORITY.
``The Association shall coordinate with the Financial
Industry Regulatory Authority in order to ease any
administrative burdens that fall on members of the
Association that are subject to regulation by the Financial
Industry Regulatory Authority, consistent with the
requirements of this subtitle and the Federal securities
laws.
``SEC. 332. RIGHT OF ACTION.
``(a) Right of Action.--Any person aggrieved by a decision
or action of the Association may, after reasonably exhausting
available avenues for resolution within the Association,
commence a civil action in an appropriate United States
district court, and obtain all appropriate relief.
``(b) Association Interpretations.--In any action under
subsection (a), the court shall give appropriate weight to
the interpretation of the Association of its bylaws and
standards and this subtitle.
``SEC. 333. FEDERAL FUNDING PROHIBITED.
``The Association may not receive, accept, or borrow any
amounts from the Federal Government to pay for, or reimburse,
the Association for, the costs of establishing or operating
the Association.
``SEC. 334. DEFINITIONS.
``For purposes of this subtitle, the following definitions
shall apply:
``(1) Business entity.--The term `business entity' means a
corporation, association, partnership, limited liability
company, limited liability partnership, or other legal
entity.
``(2) Depository institution.--The term `depository
institution' has the meaning as in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813).
``(3) Home state.--The term `home State' means the State in
which the insurance producer maintains its principal place of
residence or business and is licensed to act as an insurance
producer.
``(4) Insurance.--The term `insurance' means any product,
other than title insurance or bail bonds, defined or
regulated as insurance by the appropriate State insurance
regulatory authority.
``(5) Insurance producer.--The term `insurance producer'
means any insurance agent or broker, excess or surplus lines
broker or agent, insurance consultant, limited insurance
representative, and any other individual or entity that
sells, solicits, or negotiates policies of insurance or
offers advice, counsel, opinions or services related to
insurance.
``(6) Insurer.--The term `insurer' has the meaning as in
section 313(e)(2)(B) of title 31, United States Code.
``(7) Principal place of business.--The term `principal
place of business' means the State in which an insurance
producer maintains the headquarters of the insurance producer
and, in the case of a business entity, where high-level
officers of the entity direct, control, and coordinate the
business activities of the business entity.
``(8) Principal place of residence.--The term `principal
place of residence' means the State in which an insurance
producer resides for the greatest number of days during a
calendar year.
``(9) State.--The term `State' includes any State, the
District of Columbia, any territory of the United States, and
Puerto Rico, Guam, American Samoa, the Trust Territory of the
Pacific Islands, the Virgin Islands, and the Northern Mariana
Islands.
[[Page S4595]]
``(10) State law.--
``(A) In general.--The term `State law' includes all laws,
decisions, rules, regulations, or other State action having
the effect of law, of any State.
``(B) Laws applicable in the district of columbia.--A law
of the United States applicable only to or within the
District of Columbia shall be treated as a State law rather
than a law of the United States.
``SEC. 335. SUNSET.
``The provisions of this subtitle, and any program or
authorities established or granted therein or derived
therefrom, shall terminate on the date that is 2 years after
the date on which the Association approves its first member
pursuant to section 323.''.
(b) Technical Amendment.--The table of contents for the
Gramm-Leach-Bliley Act is amended by striking the items
relating to subtitle C of title III and inserting the
following new items:
``Subtitle C--National Association of Registered Agents and Brokers
``Sec. 321. National Association of Registered Agents and Brokers.
``Sec. 322. Purpose.
``Sec. 323. Membership.
``Sec. 324. Board of directors.
``Sec. 325. Bylaws, standards, and disciplinary actions.
``Sec. 326. Powers.
``Sec. 327. Report by the Association.
``Sec. 328. Liability of the Association and the Board members,
officers, and employees of the Association.
``Sec. 329. Presidential oversight.
``Sec. 330. Relationship to State law.
``Sec. 331. Coordination with Financial Industry Regulatory Authority.
``Sec. 332. Right of action.
``Sec. 333. Federal funding prohibited.
``Sec. 334. Definitions.
``Sec. 335. Sunset.''.
____________________