Date: 2001-11-29
Speaker: GEORGE MILLER (democrat)
Chamber: H
State: California

Mr. Speaker. I thank the gentlewoman for yielding me this time. Mr. Speaker. I was hoping that we would have a: bill today that we could support. because I think the committee. on the underlying bill on insurance protection for the real estate industry and for the insurance companies and others. is on the right track. Yet we find this bill is substantially now loaded down with a whole series of tort reforms. without hearings. as many of my colleagues have alluded to here. and now threatens to delay. if not make impossible. the passage of this legislation. I also. though. want to raise some questions with respect to the legislation as we continue the consideration. I would refer Members of the House to the Wall Street Journal of November 15. an article on the insurance companies that points out that the market has taken a somewhat different picture of the insurance industry than the insurance industry is presenting to the Congress of the United States. The title of the article is. "Insurance Coinpanies Benefit From September 11. Still Seek Federal Aid." The article talks about raising premiums 100 percent. or 400 percent in some instances. It also makes it very clear that the insurance companies see this as an opportunity. A number of memos sent back and forth in Marsh & McLennan and other large insurance companies have made it clear the time is now to fully exploit the opportunity that was presented by September 11 in terms of creating new companies. creating new entities. and going after new capital. In an effort to raise a billion dollars in new capital within a few days after September 11. in an insurance industry that is seriously in trouble supposedly. what they are telling us in Washington. they were so oversubscribed they had to turn people away. Other entities then came in. and they raised about $4 billion in new capital. Many of the companies have sold additional stock that have been subscribed to by very. very reputable investors that have decided that this is a good take. On the date of that article the insurance company stocks were up about 7 percent. What is going on here? They are running in and frightening the banks and frightening the real estate industry. everybody else. raising their premiums. and they know on the other end they are going to get Federal protection. As the article points out. they know they have an ability now to raise premiums up to 400 percent. to limit their liability. and the payouts will be taken on the other end. That is why I think this committee is on the right track with the suggestion that we are prepared to help them out. but we also think there ought to be some payback. Because. again. the article makes it very clear. and the financing of this industry makes it very clear that even with the huge payouts they will experience from September 11 their reserves are sufficient. Over time. and hope to God we do not have other terrorist activities. those reserves will be built up. The premiums will be raised. We may have a catastrophic event. we may have to step in. but the nature of the industry is they have the ability to pay the taxpayer back. There are others who want to suggest that $10 billion and the industry is off the hook. or that we pick up all of the cost. I think we have to be very careful about how we approach this and we recognize the real financial capacity of this industry. They are running around telling people they are not going to rewrite the insurance. That is not what they are telling other people where. they know they can extract the dollars. There may be some people that cannot afford this coverage. That is a different issue. But. clearly. this industry is rapidly rebuilding its reserves. rapidly rebuilding its premium base. rapidly rebuilding its revenues and its capital. That is what is going on on Wall Street. that is what is going on in the American marketplace. and they are running around Washington with a tin cup suggesting. in many instances. that we should pick up all this liability as a result of a terrorist attack. I think the committee is on the right track. Unfortunately. this bill now has been saddled with a whole series of issues that threaten to bring down its consideration by both bodies. I would also raise the point raised by the minority leader that. once again. here we are bailing out an industry that obviously is exuding a great market force at this very time. and yet we have hundreds of thousands of families that have lost their livelihood. that have no market force. have no ability to make their mortgage payments. and this Congress is about to leave town. about to adjourn. In spite of the representations of the President of the United States that he was going to have money. that money was taken away last night for unemployment insurance. That money was taken away from the States that could help pay peoples health insurance. That was a Presidential program that was destroyed last night. The Speaker said he was going to work with the minority leader to help people put out of work in the airline industry and elsewhere because of September 11. Nothing has happened on that front. So what we find here is that the majority party is keeping from us any consideration of help for those people who. as a result of September 11. lost their employment. or those people who lost their employment before September 11 but now see their opportunities greatly diminished. We are going to do nothing for those people. Yet we are here. after the airline industry. and now with the insurance industry. Clearly. this Congress can see its way to help the most unfortunate people in our society and not make them further victims of the attack on September 11. Mr. Speaker. I submit for the RECORD the full newspaper article I referred to earlier. [From the Wall Street Journal. Nov. 15. 2001]