Terrorism and Risk Insurance Act (TRIA)
RIMS actively lobbied in support of a long-term extension of TRIA, the financial backstop, enabling commercial insurers to provide affordable terrorism coverage to policyholders when businesses could not obtain terrorism coverage. Prior to passage of TRIA, previous extensions were for shorter terms. Just prior to expiration, President Bush signed into law the TRIA Extension Act of 2007, which extends the federal backstop for another seven years. The new act also eliminates the distinction between foreign and domestic terrorism and makes adjustments to the current mandatory recoupment requirements of the TRIA program through the use of accelerated policyholder surcharges during the first four years of the seven-year extension (2008-2012). The bill also requires two studies from the Government Accountability Office. The first is a study on the availability and affordability of insurance coverage for losses caused by terrorist attacks involving nuclear, biological, chemical, or radiological materials requiring a report no later than one year after the enactment of the program. The other is to determine whether there are specific markets in the United States where there are unique capacity constraints on the amount of terrorism insurance available, requiring a report no later than 180 days after the enactment of the program. RIMS continues to work with GAO on the studies.
National Association of Registered Agents and Brokers Act of 2008
Introduced by Rep. David Scott (D-GA), H.R. 5611 would establish a National Association of Registered Agents and Brokers Association. The Association will provide a mechanism through which licensing, continuing education, and other insurance producer qualification requirements and conditions can be adopted and applied on a multi-state basis, while preserving the right of States to license, supervise, and discipline insurance producers, and to prescribe and enforce laws and regulations with regard to insurance-related consumer protection and unfair trade practices. H.R 5611 was introduced on March 13, 2008 and was referred to the House Financial Services Committee.
Nonadmitted Reinsurance Reform Act of 2007 (Surplus Lines Bill)
RIMS successfully lobbied to modify the original legislation, to include a broader definition of "Qualified Risk Manager" so as to permit RIMS members to meet the criteria. RIMS supported the passage of the Nonadmitted Reinsurance Reform Act of 2007, introduced by Rep. Dennis Moore (D-KS) on February 15. H.R. 1065 was passed in the House on June 25, 2007 and its companion bill, S.B. 929 is still currently under review in the Senate. S.B.929, sponsored by Senators Mel Martinez (R-FL) and Bill Nelson (D-FL), has been referred to the Senate Committee on Banking, Housing, and Urban Affairs, where it still remains. The Senate bill does contain the definition of "Risk Manager" opposed by RIMS. However, RIMS has received assurance by bill sponsors that the bill will be amended to incorporate the House Bill language. RIMS and other interest groups continue to urge the committee to hold a hearing on the legislation and move prior to the end of the Congress.
National Insurance Act of 2007 (Optional Federal Charter)
On May 24, 2007 Senators John Sununu (R-NH) and Tim Johnson (D-SD) introduced S. 40, "the National Insurance Act of 2007", into the Senate. S. 40 would provide for optional federal regulation of insurance similar to the dual banking regulations (federal and state chartered banks). The bill was referred to the Committee on Banking, Housing, and Urban Affairs. A companion bill, H.R.3200, was introduced into the House on July 26, 2007 by Representatives Melissa Bean (D-IL) and Edward Royce (R-CA). This bill has been referred to the Financial Services Committee as well as the House Judiciary Committee. Hearings in the House on general insurance issues, including the optional federal charter legislation, are expected this spring. RIMS also issued a press release in support of U.S. Treasury's "Blueprint For A Modernized Financial Regulatory Structure" which calls on Congress to pass legislation providing for optional federal regulation.
Liability Risk Retention Act Amendment
Legislation is being drafted to expand the Liability Risk Retention Act to include property coverages. Representative Dennis Moore (D-KS) has expressed his interest in sponsoring the bill and hearings may be held on it in late April.
Natural Catastrophe Legislation
RIMS is following a myriad of legislation to address the recurring dislocations caused by natural disasters. H.R. 91 was introduced by Rep. Ginny Brown-Waite (R-FL) to establish a program to provide reinsurance for State natural catastrophe insurance programs to help the United States better prepare for and protect its citizens against the ravages of natural catastrophes, to encourage and promote mitigation and prevention for, and recovery and rebuilding from such catastrophes, and to better assist in the financial recovery from such catastrophes. The bill currently remains in the House Financial Services Committee.
H.R. 3355 is entitled "the Homeowners' Defense Act of 2007", was introduced by Reps. Ron Klein (D-FL), and Tim Mahoney (D-FL). The Klein/Mahoney bill provides a venue for state-sponsored insurance funds to voluntarily pool their catastrophe risk with one another, and then transfer that risk to the private markets through the use of catastrophe bonds and reinsurance contracts. This bill also creates a National Homeowners Insurance Stabilization Program to provide low interest federal loans to states impacted by severe natural disasters. Specifically, the Program makes available two types of loans: liquidity loans and catastrophic loans. Liquidity loans would allow a states' catastrophe fund to cover its liability in the event that it is not fully funded. Catastrophic loans would all state catastrophes fund to cover damages that exceed its liability. H.R. 3355 passed the House of Representatives. Companion legislation was introduced in the Senate, by Senator Clinton (D-NY) and is pending.
Additionally, Rep. Gus Bilirakis (R-FL), introduced H.R.913. That bill amends the Internal Revenue Code to allow individual and business taxpayers in certain states a tax credit for 25% of their qualified hurricane and tornado mitigation property expenditures up to $5,000 for any taxable year. It defines such expenditures as expenditures in a dwelling unit to improve the strength of a roof deck attachment, create a secondary water barrier, improve the durability of a roof covering, brace gable-end walls, reinforce the connections between a roof and supporting wall, protect against windborne debris, or protect exterior doors and garages. This bill is in the House Committee on Ways and Means. As a companion to H.R.913, Senators Mel Martinez (R-FL) and Bill Nelson (D-FL) introduced S.B. 930 on March 20, 2007. The bill has been referred to the Senate Finance Committee.
In the Senate, Senators Bill Nelson (D-FL) and Mel Martinez (R-FL) introduced S. 928. This bill establishes a program to provide more protection at lower cost through a national backstop for State natural catastrophe insurance programs to help the United States better prepare for and protect its citizens against the ravages of natural catastrophes, to encourage and promote mitigation and prevention for, and recovery and rebuilding from such catastrophes, to better assist in the financial recovery from such catastrophes, and to develop a rigorous process of continuous improvement. It was referred to the Senate's Banking, Housing, and Urban Affairs Committee.
National Flood Insurance Program (NFIP)
There are several bills in the House of Representatives. The first, more comprehensive bill, introduced by House Financial Services Chair Barney Frank (D-MA) and Rep. Judy Biggert (R-IL) is.H.R. 1682. The legislation would phase out subsidized rates on vacation homes and second homes, and permit small business owners to purchase business interruption coverage in order to meet payroll and other obligations in the event of flooding. Additionally, it would update maximum insurance coverage limits for residential and nonresidential properties.
Another bill, H.R. 3121, was introduced by Rep. Maxine Waters. This legislation reauthorizes the National Flood Insurance Program (NFIP) for five years, and provides for reforms to the NFIP, improves flood mapping, and expands the program to provide for multiple peril coverage. This bill passed the U.S. House of Representatives by a vote of 263 to 146. Companion legislation has not been introduced, but the Senate will most likely act to move reauthorization legislation with fewer changes to the program. The program is set to expire September 30, 2008.
Repeal of McCarran-Ferguson
Introduced by Representative Peter DeFazio (D-OR), H.R. 1081, amends the McCarran-Ferguson Act to make the Federal Trade Commission Act, as it relates to areas other than unfair methods of competition, applicable to the business of insurance to the extent that such business is not regulated by state law. It also authorizes the Department of Justice (DOJ) and the Federal Trade Commission (FTC) to issue joint statements of their antitrust enforcement policies regarding joint activities in the business of insurance. On February 16, 2007 it was referred to the House Financial Services Committee, Committee on the Judiciary, and Energy and Commerce Committee, and it is currently still in Committee. S.B 610 was introduced in the Senate the same day as the House bill. It was referred to the Judiciary Committee and hearings have been held, but no further action has been taken.