II 

112TH CONGRESS 

1ST SESSION S. 1429 

To establish a bipartisan commission on insurance reform. 

IN THE SENATE OF THE UNITED STATES 

JULY 27, 2011 

Mr. NELSON of Florida introduced the following bill; which was read twice and 

referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To establish a bipartisan commission on insurance reform. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Commission on Cata5 strophic Disaster Risk and Insurance Act of 2011’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Hurricanes Katrina, Rita, and Wilma, 

9 which struck the United States in 2005, caused 

10 more than $200,000,000,000 in total economic 

11 losses, including insured and uninsured losses. 


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1 (2) Although private sector insurance is cur2 rently available to spread some catastrophe-related 

3 losses throughout the United States and internation4 ally, most experts believe there will be significant in5 surance and reinsurance shortages, resulting in dra6 matic rate increases for consumers and businesses, 

7 and the unavailability of catastrophe insurance. 

8 (3) The Federal Government has provided and 

9 will continue to provide billions of dollars and re10 sources to pay for losses from catastrophes, includ11 ing hurricanes, volcanic eruptions, tsunamis, tor12 nados, and other disasters, at huge costs to the peo13 ple of the United States. 

14 (4) The Federal Government has a critical in15 terest in ensuring appropriate and fiscally respon16 sible risk management of catastrophes. Mortgages 

17 require reliable property insurance, and the unavail18 ability of reliable property insurance would make 

19 most real estate transactions impossible. In addition, 

20 the public health, safety, and welfare demand that 

21 structures damaged or destroyed in a catastrophe be 

22 reconstructed as soon as possible. Therefore, the in23 ability of the private sector insurance and reinsur24 ance markets to maintain sufficient capacity to en25 able people in the United States to obtain property 


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1 insurance coverage in the private sector endangers 

2 the national economy and the public health, safety, 

3 and welfare. 

4 (5) Multiple proposals have been introduced in 

5 Congress during the past decade to address cata6 strophic risk insurance, including proposals to create 

7 a national catastrophic reinsurance fund and revise 

8 the Federal tax code to allow insurers to use tax-de9 ferred catastrophe funds, yet Congress has failed to 

10 act on any of these proposals. 

11 (6) To the extent that the United States faces 

12 high risks from catastrophe exposure, essential tech13 nical information on financial structures and innova14 tions in the catastrophe insurance market is needed. 

15 (7) The most efficient and effective approach to 

16 assessing the catastrophe insurance problem in a 

17 public policy context is to establish a bipartisan com18 mission of experts to study the management of cata19 strophic disaster risk, and to require that commis20 sion to timely report its recommendations to Con21 gress so that Congress can quickly craft a solution 

22 to protect the people of the United States. 


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1 SEC. 3. ESTABLISHMENT. 

2 There is established a bipartisan Commission on Cat3 astrophic Disaster Risk and Insurance (in this Act re4 ferred to as the ‘‘Commission’’). 

5 SEC. 4. MEMBERSHIP. 

6 (a) MEMBERS.—The Commission shall be composed 

7 of the following: 

8 (1) The Administrator of the Federal Emer9 gency Management Agency or a designee of the Ad10 ministrator. 

11 (2) The Administrator of the National Oceanic 

12 and Atmospheric Administration or a designee of the 

13 Administrator. 

14 (3) Twelve additional members, of whom— 

15 (A) 1 shall be a representative of a con16 sumer group; 

17 (B) 1 shall be a representative of a pri18 mary insurance company; 

19 (C) 1 shall be a representative of a rein20 surance company; 

21 (D) 1 shall be an independent insurance 

22 agent with experience in writing property and 

23 casualty insurance policies; 

24 (E) 1 shall be a State insurance regulator; 

25 (F) 1 shall be a State emergency oper26 ations official; 


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1 (G) 1 shall be a scientist; 

2 (H) 1 shall be a faculty member of an ac3 credited university with experience in risk man4 agement; 

5 (I) 1 shall be a member of nationally rec6 ognized think tank with experience in risk man7 agement; 

8 (J) 1 shall be a homebuilder with experi9 ence in structural engineering; 

10 (K) 1 shall be a mortgage lender; and 

11 (L) 1 shall be a nationally recognized ex12 pert in antitrust law. 

13 (b) MANNER OF APPOINTMENT.— 

14 (1) IN GENERAL.—Each member of the Com15 mission described in subsection (a)(3) shall be ap16 pointed jointly by, and only upon unanimous agree17 ment of— 

18 (A) the majority leader of the Senate; 

19 (B) the minority leader of the Senate; 

20 (C) the Speaker of the House of Rep21 resentatives; and 

22 (D) the minority leader of the House of 

23 Representatives. 


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1 (2) CONSULTATION.—In making an appoint2 ment under paragraph (1), each individual described 

3 in paragraph (1) shall consult with the President. 

4 (c) ELIGIBILITY LIMITATION.—Except as provided in 

5 subsection (a), no member or officer of Congress, or other 

6 officer of the Executive Branch of the United States Gov7 ernment or any State government may be appointed to 

8 be a member of the Commission. 

9 (d) PERIOD OF APPOINTMENT.— 

10 (1) IN GENERAL.—Each member of the Com11 mission shall be appointed to serve until the termi12 nation of the Commission. 

13 (2) VACANCIES.—A vacancy on the Commission 

14 shall not affect its powers, but shall be filled in the 

15 same manner as the original appointment was made. 

16 (e) QUORUM.— 

17 (1) MAJORITY.—A majority of the members of 

18 the Commission shall constitute a quorum, but a 

19 lesser number may hold hearings. 

20 (2) APPROVAL ACTIONS.—All recommendations 

21 and reports of the Commission required under this 

22 Act shall be approved by a majority vote of a 

23 quorum of the Commission. 

24 (f) CHAIRPERSON.—The majority leader of the Sen25 ate, the minority leader of the Senate, the Speaker of the 


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1 House of Representatives, and the minority leader of the 

2 House of Representatives shall jointly select 1 member ap3 pointed pursuant to subsection (a) to serve as the Chair4 person of the Commission. 

5 (g) MEETINGS.—The Council shall meet at the call 

6 of the Chairperson or a majority of the members of the 

7 Commission then serving. 

8 SEC. 5. DUTIES OF THE COMMISSION. 

9 (a) ASSESSMENT.—The Commission shall assess— 

10 (1) the condition of the property and casualty 

11 insurance and reinsurance markets in the aftermath 

12 of Hurricane Katrina of 2005, Hurricane Rita of 

13 2005, Hurricane Wilma of 2005, and the 4 major 

14 hurricanes that struck the United States in 2004; 

15 and 

16 (2) the ongoing exposure of the United States 

17 to earthquakes, volcanic eruptions, tsunamis, and 

18 floods. 

19 (b) RECOMMENDATIONS.— 

20 (1) DEVELOPMENT OF RECOMMENDATIONS.— 

21 The Commission shall develop recommendations for 

22 any legislative or regulatory changes necessary to— 

23 (A) improve the domestic and international 

24 financial health and competitiveness of the 


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1 property and casualty insurance and reinsur2 ance markets; and 

3 (B) ensure that consumers have— 

4 (i) adequate insurance coverage avail5 able when an insured event occurs; and 

6 (ii) the best possible range of insur7 ance products at competitive prices. 

8 (2) CONSIDERATIONS.—In developing any rec9 ommendations under paragraph (1), the Commission 

10 shall consider— 

11 (A) the structure of the catastrophic insur12 ance and reinsurance markets and the relevant 

13 commercial practices in such markets for pro14 viding insurance protection to different types of 

15 people in the United States; 

16 (B) the constraints of and opportunities 

17 for implementing a catastrophic insurance sys18 tem that could resolve key obstacles that im19 pede broader implementation of catastrophe 

20 risk management and financing; 

21 (C) methods to improve risk underwriting 

22 practices, including— 

23 (i) analysis of modalities of risk trans24 fer for potential financial losses; 


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1 (ii) assessment of private securitiza2 tion of insurances risks; 

3 (iii) private-public partnerships to in4 crease insurance capacity in constrained 

5 markets; and 

6 (iv) the financial feasibility and sus7 tainability of a national catastrophe pool or 

8 regional catastrophe pools designed to pro9 vide adequate insurance coverage and in10 creased underwriting capacity to insurers 

11 and reinsurers; 

12 (D) approaches for implementing a public 

13 insurance scheme for low-income communities, 

14 in order to promote risk reduction and explicit 

15 insurance coverage in such communities; 

16 (E) methods to strengthen regulatory re17 quirements for insurance and supervision of 

18 such requirements, including solvency for cata19 strophic risk reserves; 

20 (F) methods to promote public insurance 

21 policies linked to programs for loss reduction 

22 among people in the United States without in23 surance; 

24 (G) methods to strengthen the risk assess25 ment and enforcement of structural mitigation 


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1 and vulnerability reduction measures, such as 

2 zoning and building code compliance; and 

3 (H) the appropriate role for the Federal 

4 Government in stabilizing the property and cas5 ualty insurance and reinsurance markets, with 

6 an analysis of— 

7 (i) options such as— 

8 (I) a reinsurance mechanism; 

9 (II) the modernization of Federal 

10 taxation policies; and 

11 (III) an ‘‘insurance of last re12 sort’’ mechanism; and 

13 (ii) how to fund the options described 

14 in clause (i). 

15 SEC. 6. REPORT. 

16 Not later than 180 days after the date on which all 

17 members of the Commission are appointed, the Commis18 sion shall submit to the President and Congress a final 

19 report containing a detailed statement of the results of 

20 the assessment and the recommendations required under 

21 section 5. 

22 SEC. 7. POWERS OF THE COMMISSION. 

23 (a) HEARINGS.—The Commission or, at the direction 

24 of the Commission, any subcommittee or member of the 


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1 Commission, may, for the purpose of carrying out this 

2 Act— 

3 (1) hold such public hearings in such cities and 

4 countries, sit and act at such times and places, take 

5 such testimony, receive such evidence, and admin6 ister such oaths or affirmations as the Commission 

7 or such subcommittee or member considers advis8 able; and 

9 (2) require, by subpoena or otherwise, the at10 tendance and testimony of such witnesses and the 

11 production of such books, records, correspondence, 

12 memoranda, papers, documents, tapes, and materials 

13 as the Commission or such subcommittee or member 

14 considers advisable. 

15 (b) ISSUANCE AND ENFORCEMENT OF SUB16 POENAS.— 

17 (1) ISSUANCE.—Subpoenas issued under sub18 section (a) shall bear the signature of the Chair19 person of the Commission and shall be served by any 

20 person or class of persons designated by the Chair21 person for that purpose. 

22 (2) ENFORCEMENT.—In the case of contumacy 

23 or failure to obey a subpoena issued under sub24 section (a), the United States district court for the 

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1 sides, is served, or may be found may issue an order 

2 requiring such person to appear at any designated 

3 place to testify or to produce documentary or other 

4 evidence. Any failure to obey the order of the court 

5 may be punished by the court as a contempt of that 

6 court. 

7 (3) CONFIDENTIALITY.— 

8 (A) IN GENERAL.—Information obtained 

9 under a subpoena issued under subsection (a) 

10 which is deemed confidential, or with reference 

11 to which a request for confidential treatment is 

12 made by the person furnishing such informa13 tion— 

14 (i) shall be exempt from disclosure 

15 under section 552 of title 5, United States 

16 Code; and 

17 (ii) shall not be published or disclosed 

18 unless the Commission determines that the 

19 withholding of such information is contrary 

20 to the interest of the United States. 

21 (B) EXCEPTION.—The requirements of 

22 subparagraph (A) shall not apply to the publi23 cation or disclosure of any data aggregated in 

24 a manner that ensures protection of the identity 

25 of the person furnishing such data. 


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1 (c) AUTHORITY OF MEMBERS OR AGENTS OF THE

2 COMMISSION.—Any member or agent of the Commission 

3 may, if authorized by the Commission, take any action 

4 which the Commission is authorized to take by this Act. 

5 (d) OBTAINING OFFICIAL DATA.— 

6 (1) AUTHORITY.—Notwithstanding any provi7 sion of section 552a of title 5, United States Code, 

8 the Commission may secure directly from any de9 partment or agency of the United States any infor10 mation necessary to enable the Commission to carry 

11 out the purposes of this Act. 

12 (2) PROCEDURE.—Upon request of the Chair13 person of the Commission, the head of that depart14 ment or agency shall furnish the information re15 quested to the Commission. 

16 (e) POSTAL SERVICES.—The Commission may use 

17 the United States mails in the same manner and under 

18 the same conditions as other departments and agencies of 

19 the Federal Government. 

20 (f) ADMINISTRATIVE SUPPORT SERVICES.—Upon the 

21 request of the Commission, the Administrator of General 

22 Services shall provide to the Commission, on a reimburs23 able basis, any administrative support services necessary 

24 for the Commission to carry out its responsibilities under 

25 this Act. 


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1 (g) GIFTS.— 

2 (1) IN GENERAL.—The Commission may ac3 cept, use, and dispose of gifts or donations of serv4 ices or property. 

5 (2) REGULATIONS.—The Commission shall 

6 adopt internal regulations governing the receipt of 

7 gifts or donations of services or property similar to 

8 those described in part 2601 of title 5, Code of Fed9 eral Regulations. 

10 SEC. 8. COMMISSION PERSONNEL MATTERS. 

11 (a) COMPENSATION OF MEMBERS.—Each member of 

12 the Commission who is not an officer or employee of the 

13 Federal Government shall be compensated at a rate equal 

14 to the daily equivalent of the annual rate of basic pay pre15 scribed for level IV of the Executive Schedule under sec16 tion 5315 of title 5, United States Code, for each day (in17 cluding travel time) during which such member is engaged 

18 in the performance of the duties of the Commission. All 

19 members of the Commission who are officers or employees 

20 of the United States shall serve without compensation in 

21 addition to that received for their services as officers or 

22 employees of the United States. 

23 (b) TRAVEL EXPENSES.—The members of the Com24 mission shall be allowed travel expenses, including per 

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1 ees of agencies under subchapter I of chapter 57 of title 

2 5, United States Code, while away from their homes or 

3 regular places of business in the performance of services 

4 for the Commission. 

5 (c) SUBCOMMITTEES.—The Commission may estab6 lish subcommittees and appoint members of the Commis7 sion to such subcommittees as the Commission considers 

8 appropriate. 

9 (d) STAFF.—Subject to such policies as the Commis10 sion may prescribe, the Chairperson of the Commission 

11 may appoint and fix the pay of such additional personnel 

12 as the Chairperson considers appropriate to carry out the 

13 duties of the Commission. 

14 (e) APPLICABILITY OF CERTAIN CIVIL SERVICE

15 LAWS.—Employees of the Commission may be— 

16 (1) appointed without regard to the provisions 

17 of title 5, United States Code, governing appoint18 ments in the competitive service; and 

19 (2) paid without regard to the provisions of 

20 chapter 51 and subchapter III of chapter 53 of title 

21 5, United States Code, relating to classification and 

22 General Schedule pay rates, except that an indi23 vidual so appointed may not receive pay in excess of 

24 the annual rate of basic pay prescribed for level IV 


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1 of the Executive Schedule under section 5315 of 

2 that title. 

3 (f) EXPERTS AND CONSULTANTS.—In carrying out 

4 the duties of the Commission, the Commission may pro5 cure temporary and intermittent services of consultants 

6 and experts under section 3109(b) of title 5, United States 

7 Code, at rates for individuals which do not exceed the daily 

8 equivalent of the annual rate of basic pay prescribed for 

9 level IV of the Executive Schedule under section 5315 of 

10 that title. 

11 (g) DETAIL OF GOVERNMENT EMPLOYEES.—Upon 

12 request of the Chairperson of the Commission— 

13 (1) any Federal Government employee may be 

14 detailed to the Commission to assist in carrying out 

15 the duties of the Commission on a reimbursable 

16 basis; and 

17 (2) a detail under paragraph (1) shall be with18 out interruption or loss of civil service status or 

19 privilege. 

20 SEC. 9. TERMINATION. 

21 The Commission shall terminate 60 days after the 

22 date on which the Commission submits the report required 

23 under section 6. 


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1 SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 

2 There are authorized to be appropriated $5,000,000 

3 to carry out this Act. 

Æ 


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