Commission on Catastrophic Disaster Risk and Insurance Act of 2006 - Establishes a bipartisan Commission on Catastrophic Disaster Risk and Insurance to assess: (1) the condition of the property and casualty insurance and reinsurance markets in the aftermath of Hurricanes Katrina, Rita, and Wilma in 2005, and the four major hurricanes that struck the United States in 2004; (2) the ongoing exposure of the United States to earthquakes, volcanic eruptions, tsunamis, and floods; and (3) recommend and report legislative and regulatory changes that will improve the domestic and international financial health and competitiveness of such markets.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5587 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5587
To establish a bipartisan commission on insurance reform.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 12, 2006
Mr. Meek of Florida (for himself and Mr. Davis of Florida) introduced
the following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To establish a bipartisan commission on insurance reform.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Commission on Catastrophic Disaster
Risk and Insurance Act of 2006''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Hurricanes Katrina, Rita, and Wilma, which struck the
United States in 2005, caused over $200 billion in total
economic losses, including insured and uninsured losses.
(2) Although private sector insurance is currently
available to spread some catastrophe-related losses throughout
the Nation and internationally, most experts believe there will
be significant insurance and reinsurance shortages, resulting
in dramatic rate increases for consumers and businesses, and
the unavailability of catastrophe insurance.
(3) The Federal Government has provided and will continue
to provide billions of dollars and resources to pay for losses
from catastrophes, including hurricanes, volcanic eruptions,
tsunamis, tornados, and other disasters, at huge costs to
American taxpayers.
(4) The Federal Government has a critical interest in
ensuring appropriate and fiscally responsible risk management
of catastrophes. Mortgages require reliable property insurance,
and the unavailability of reliable property insurance would
make most real estate transactions impossible. In addition, the
public health, safety, and welfare demand that structures
damaged or destroyed in a catastrophe be reconstructed as soon
as possible. Therefore, the inability of the private sector
insurance and reinsurance markets to maintain sufficient
capacity to enable Americans to obtain property insurance
coverage in the private sector endangers the national economy
and the public health, safety, and welfare.
(5) Multiple proposals have been introduced in the United
States Congress over the past decade to address catastrophic
risk insurance, including the creation of a national
catastrophic reinsurance fund and the revision of the Federal
tax code to allow insurers to use tax-deferred catastrophe
funds, yet Congress has failed to act on any of these
proposals.
(6) To the extent the United States faces high risks from
catastrophe exposure, essential technical information on
financial structures and innovations in the catastrophe
insurance market is needed.
(7) The most efficient and effective approach to assessing
the catastrophe insurance problem in the public policy context
is to establish a bipartisan commission of experts to study the
management of catastrophic disaster risk, and to require such
commission to timely report its recommendations to Congress so
that Congress can quickly craft a solution to protect the
American people.
SEC. 3. ESTABLISHMENT.
There is established a bipartisan Commission on Catastrophic
Disaster Risk and Insurance (in this Act referred to as the
``Commission'').
SEC. 4. MEMBERSHIP.
(a) Members.--The Commission shall be composed of the following:
(1) The Director of the Federal Emergency Management Agency
or a designee of the Director.
(2) The Administrator of the National Oceanic and
Atmospheric Administration or a designee of the Administrator.
(3) 12 additional members or their designees of whom one
shall be--
(A) a representative of a consumer group;
(B) a representative of a primary insurance
company;
(C) a representative of a reinsurance company;
(D) an independent insurance agent with experience
in writing property and casualty insurance policies;
(E) a State insurance regulator;
(F) a State emergency operations official;
(G) a scientist;
(H) a faculty member of an accredited university
with experience in risk management;
(I) a member of nationally recognized think tank
with experience in risk management;
(J) a homebuilder with experience in structural
engineering;
(K) a mortgage lender; and
(L) a nationally recognized expert in antitrust
law.
(b) Manner of Appointment.--
(1) In general.--Any member of the Commission described
under subsection (a)(3) shall be appointed only upon unanimous
agreement of--
(A) the majority leader of the Senate;
(B) the minority leader of the Senate;
(C) the Speaker of the House of Representatives;
and
(D) the minority leader of the House of
Representatives.
(2) Consultation.--In making any appointment under
paragraph (1), each individual described in paragraph (1) shall
consult with the President.
(c) Eligibility Limitation.--Except as provided in subsection (a),
no member or officer of the Congress, or other member or officer of the
Executive Branch of the United States Government or any State
government may be appointed to be a member of the Commission.
(d) Period of Appointment.--
(1) In general.--Each member of the Commission shall be
appointed for the life of the Commission.
(2) Vacancies.--A vacancy on the Commission shall not
affect its powers, but shall be filled in the same manner as
the original appointment was made.
(e) Quorum.--
(1) Majority.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number may hold
hearings.
(2) Approval actions.--All recommendations and reports of
the Commission required by this Act shall be approved only by a
majority vote of a quorum of the Commission.
(f) Chairperson.--The majority leader of the Senate, the minority
leader of the Senate, the Speaker of the House of Representatives, and
the minority leader of the House of Representatives shall jointly
select 1 member appointed pursuant to subsection (a) to serve as the
Chairperson of the Commission.
(g) Meetings.--The Council shall meet at the call of its
Chairperson or a majority of its members at any time.
SEC. 5. DUTIES OF THE COMMISSION.
The Commission shall--
(1) assess--
(A) the condition of the property and casualty
insurance and reinsurance markets in the aftermath of
Hurricanes Katrina, Rita, and Wilma in 2005, and the 4
major hurricanes that struck the United States in 2004;
and
(B) the ongoing exposure of the United States to
earthquakes, volcanic eruptions, tsunamis, and floods;
and
(2) recommend and report, as required under section 6, any
necessary legislative and regulatory changes that will--
(A) improve the domestic and international
financial health and competitiveness of such markets;
and
(B) assure consumers of the--
(i) availability of adequate insurance
coverage when an insured event occurs; and
(ii) best possible range of insurance
products at competitive prices.
SEC. 6. REPORT.
(a) In General.--Not later than 90 days after the appointment of
Commission members under section 4, the Commission shall submit to the
President and the Congress a final report containing a detailed
statement of its findings, together with any recommendations for
legislation or administrative action that the Commission considers
appropriate, in accordance with the requirements of section 5.
(b) Considerations.--In developing any recommendations under
subsection (a), the Commission shall consider--
(1) the catastrophic insurance and reinsurance market
structures and the relevant commercial practices in such
insurance industries in providing insurance protection to
different sectors of the American population;
(2) the constraints and opportunities in implementing a
catastrophic insurance system that can resolve key obstacles
currently impeding broader implementation of catastrophe risk
management and financing with insurance;
(3) methods to improve risk underwriting practices,
including--
(A) analysis of modalities of risk transfer for
potential financial losses;
(B) assessment of private securitization of
insurances risks;
(C) private-public partnerships to increase
insurance capacity in constrained markets; and
(D) the financial feasibility and sustainability of
a national catastrophe pool or regional catastrophe
pools designed to provide adequate insurance coverage
and increased underwriting capacity to insurers and
reinsurers;
(4) approaches for implementing a public insurance scheme
for low-income communities, in order to promote risk reduction
and explicit insurance coverage in such communities;
(5) methods to strengthen insurance regulatory requirements
and supervision of such requirements, including solvency for
catastrophic risk reserves;
(6) methods to promote public insurance policies linked to
programs for loss reduction in the uninsured sectors of the
American population;
(7) methods to strengthen the risk assessment and
enforcement of structural mitigation and vulnerability
reduction measures, such as zoning and building code
compliance;
(8) the appropriate role for the Federal Government in
stabilizing the property and casualty insurance and reinsurance
markets, with an analysis--
(A) of options such as--
(i) a reinsurance mechanism;
(ii) the modernization of Federal taxation
policies; and
(iii) an ``insurance of last resort''
mechanism; and
(B) how to fund such options; and
(9) the merits of the 3 principle legislative proposals
currently pending in the 109th Congress, namely--
(A) the creation of a Federal catastrophe fund to
act as a backup to State catastrophe funds;
(B) tax-deferred catastrophe accounts for insurers;
and
(C) tax-free catastrophe accounts for
policyholders.
SEC. 7. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission or, at the direction of the
Commission, any subcommittee or member of the Commission, may, for the
purpose of carrying out this Act--
(1) hold such public hearings in such cities and countries,
sit and act at such times and places, take such testimony,
receive such evidence, and administer such oaths or
affirmations as the Commission or such subcommittee or member
considers advisable; and
(2) require, by subpoena or otherwise, the attendance and
testimony of such witnesses and the production of such books,
records, correspondence, memoranda, papers, documents, tapes,
and materials as the Commission or such subcommittee or member
considers advisable.
(b) Issuance and Enforcement of Subpoenas.--
(1) Issuance.--Subpoenas issued under subsection (a) shall
bear the signature of the Chairperson of the Commission and
shall be served by any person or class of persons designated by
the Chairperson for that purpose.
(2) Enforcement.--In the case of contumacy or failure to
obey a subpoena issued under subsection (a), the United States
district court for the judicial district in which the
subpoenaed person resides, is served, or may be found may issue
an order requiring such person to appear at any designated
place to testify or to produce documentary or other evidence.
Any failure to obey the order of the court may be punished by
the court as a contempt of that court.
(3) Confidentiality.--
(A) In general.--Information obtained under a
subpoena issued under subsection (a) which is deemed
confidential, or with reference to which a request for
confidential treatment is made by the person furnishing
such information--
(i) shall be exempt from disclosure under
section 552 of title 5, United States Code; and
(ii) shall not be published or disclosed
unless the Commission determines that the
withholding of such information is contrary to
the interest of the United States.
(B) Exception.--The requirements of subparagraph
(A) shall not apply to the publication or disclosure of
any data aggregated in a manner that ensures protection
of the identity of the person furnishing such data.
(c) Authority of Members or Agents of the Commission.--Any member
or agent of the Commission may, if authorized by the Commission, take
any action which the Commission is authorized to take by this Act.
(d) Obtaining Official Data.--
(1) Authority.--Notwithstanding any provision of section
552a of title 5, United States Code, the Commission may secure
directly from any department or agency of the United States any
information necessary to enable the Commission to carry out the
purposes of this Act.
(2) Procedure.--Upon request of the Chairperson of the
Commission, the head of that department or agency shall furnish
the information requested to the Commission.
(e) Postal Services.--The Commission may use the United States
mails in the same manner and under the same conditions as other
departments and agencies of the Federal Government.
(f) Administrative Support Services.--Upon the request of the
Commission, the Administrator of General Services shall provide to the
Commission, on a reimbursable basis, any administrative support
services necessary for the Commission to carry out its responsibilities
under this Act.
(g) Gifts.--
(1) In general.--The Commission may accept, use, and
dispose of gifts or donations of services or property.
(2) Regulations.--The Commission shall adopt internal
regulations governing the receipt of gifts or donations of
services or property similar to those described in part 2601 of
title 5, Code of Federal Regulations.
SEC. 8. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission who is
not an officer or employee of the Federal Government shall be
compensated at a rate equal to the daily equivalent of the annual rate
of basic pay prescribed for GS-18 of the General Schedule under section
5332 of title 5, United States Code, for each day (including travel
time) during which such member is engaged in the performance of the
duties of the Commission. All members of the Commission who are
officers or employees of the United States shall serve without
compensation in addition to that received for their services as
officers or employees of the United States.
(b) Travel Expenses.--The members of the Commission shall be
allowed travel expenses, including per diem in lieu of subsistence, at
rates authorized for employees of agencies under subchapter I of
chapter 57 of title 5, United States Code, while away from their homes
or regular places of business in the performance of services for the
Commission.
(c) Subcommittees.--The Commission may establish subcommittees and
appoint persons to such subcommittees as the Commission considers
appropriate.
(d) Staff.--Subject to such policies as the Commission may
prescribe, the Chairperson of the Commission may appoint and fix the
pay of such additional personnel as the Chairperson considers
appropriate to carry out the duties of the Commission.
(e) Applicability of Certain Civil Service Laws.--Subcommittee
members and staff of the Commission may be--
(1) appointed without regard to the provisions of title 5,
United States Code, governing appointments in the competitive
service; and
(2) paid without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of that title relating to
classification and General Schedule pay rates, except that an
individual so appointed may not receive pay in excess of the
annual rate of basic pay prescribed for GS-18 of the General
Schedule under section 5332 of that title.
(f) Experts and Consultants.--In carrying out its objectives, the
Commission may procure temporary and intermittent services of
consultants and experts under section 3109(b) of title 5, United States
Code, at rates for individuals which do not exceed the daily equivalent
of the annual rate of basic pay prescribed for GS-18 of the General
Schedule under section 5332 of that title.
(g) Detail of Government Employees.--Upon request of the
Chairperson of the Commission, any Federal Government employee may be
detailed to the Commission to assist in carrying out the duties of the
Commission--
(1) on a reimbursable basis; and
(2) such detail shall be without interruption or loss of
civil service status or privilege.
SEC. 9. TERMINATION.
The Commission shall terminate 60 days after the date on which the
Commission submits its report under section 6.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated $5,000,000 to carry out the
purposes of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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