[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2349 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 2349
To require the Secretary of the Treasury to establish a catastrophic
property loss reinsurance program, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 17, 2025
Mr. Schiff (for himself and Ms. Hirono) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To require the Secretary of the Treasury to establish a catastrophic
property loss reinsurance program, and for other purposes.
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 ``Incorporating National Support for
Unprecedented Risks and Emergencies Act'' or the ``INSURE Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) All-perils property insurance policy.--The term ``all-
perils property insurance policy'' means a property insurance
policy approved by a State which includes coverage for
catastrophe perils as those perils are added to the Program.
(2) Catastrophe peril.--The term ``catastrophe peril''
means the damage caused by--
(A) wind, hurricane, wildfire, severe convective
storm, and flood as they are added to the Program under
section 3(d);
(B) earthquake, conditioned on the report under
section 4(2); and
(C) any other peril as determined by the Secretary
and added to the Program.
(3) Engaged in the business of insurance.--The term
``engaged in the business of insurance'' means a person or
entity that is subject to oversight by a State insurance
department.
(4) Fund.--The term ``Fund'' means the Federal Catastrophe
Reinsurance Fund established under section 3(i).
(5) Insurer.--The term ``insurer''--
(A) means an admitted or non-admitted insurance
company licensed or authorized to sell primary property
insurance by State insurance regulators; and
(B) does not include a reinsurance company or a
captive insurance company.
(6) Participating insurer.--The term ``participating
insurer'' means an insurer that is participating in the
Program.
(7) Program.--The term ``Program'' means the catastrophic
property loss reinsurance program established under section
3(a).
(8) Property insurance policy.--The term ``property
insurance policy'' means a contract of insurance, through a
policy form approved by a State insurance department, that
provides, among other coverages, coverage for physical damage
to residential or commercial property.
(9) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(10) Statistical plan.--The term ``statistical plan''
means--
(A) a description of the data elements to be
reported; and
(B) the instructions and procedures for accurately
reporting data.
SEC. 3. CATASTROPHIC PROPERTY LOSS REINSURANCE PROGRAM.
(a) In General.--Not later than 4 years after the date of enactment
of this Act, the Secretary shall establish a catastrophic property loss
reinsurance program to provide reinsurance for qualifying primary
insurance companies.
(b) Eligibility.--An insurer is qualified to participate in the
Program if such insurer--
(1) offers an all-perils property insurance policy, as
perils are phased in under subsection (d), for--
(A) residential property insurance policies; or
(B) commercial property insurance policies; and
(2) offers a loss prevention partnership with the
policyholder to encourage investments and activities that
reduce insured and economic losses from a catastrophe peril.
(c) Consultation.--The Secretary may contract with reinsurance
brokers and consultants to assist the Secretary in the design and
management of the Program.
(d) Program Phase-In Timeline.--The Secretary shall--
(1) not later than January 1 of the year beginning 4 years
after the date of enactment of this Act, operate the Program
for the perils of wind and hurricane;
(2) not later than January 1 of the year beginning 5 years
after the date of enactment of this Act, operate the Program
for the perils of severe convective storm and wildfire;
(3) not later than January 1 of the year beginning 6 years
after the date of enactment of this Act, operate the Program
for the peril of flood; and
(4) not later than the earlier of January 1 of the year
beginning 8 years after the date of enactment of this Act or
the date on which the feasibility report described in section
4(2) is submitted, operate the Program for the peril of
earthquake.
(e) Threshold for Payment.--
(1) In general.--The Secretary shall, after consulting with
the advisory committee established under subsection (h),
establish a financial threshold at which a participating
insurer may receive amounts from the fund established under
subsection (i).
(2) Threshold calculation.--The threshold established under
paragraph (1) shall be an amount that is not greater than 40
percent of the probable maximum loss of an individual
participating insurer for each catastrophe peril included in
the Program.
(3) Considerations.--In establishing the threshold
described in paragraph (1), the Secretary shall consider--
(A) the amount of reinsurance necessary to
meaningfully reduce the cost to the participating
insurer to--
(i) provide coverage for catastrophe perils
covered by the Program; and
(ii) encourage States to require
participating insurers to offer an all-perils
property insurance policy;
(B) the levels of primary insurer retention and
private reinsurance market capacity necessary to--
(i) promote stable and competitive markets
for catastrophe reinsurance; and
(ii) incentivize the establishment by
private parties of capital market alternatives
to reinsurance, for example the creation of a
market for catastrophe bonds; and
(C) the role of the Program in promoting
investments by participating insurers that would be
aimed at decreasing losses.
(f) Premiums.--
(1) In general.--The Secretary shall require participating
insurers to pay a premium to the Secretary each quarter.
(2) Premium amount considerations.--The amount of the
premium required under paragraph (1) shall reflect only the
following considerations:
(A) The expected average annual losses for the
participating insurer under the specific terms of the
reinsurance coverage, as calculated by the Secretary
based on the exposure of the participating insurer.
(B) The administrative costs to administer and
manage the Program.
(C) A trend factor to account for increases over
time in the cost of average annual losses for
participating insurers, as determined by the Secretary.
(3) Consultation.--The Secretary shall consult with the
advisory committee established under subsection (i) when
establishing premium amounts and may contract for services to
assist in the establishment of premium amounts.
(4) Minimum premium required.--The Secretary may not
establish any premium that is less than 50 percent of the
amount equal to the sum of the--
(A) expected average annual losses for the
participating insurer, as calculated by the Secretary
based on the exposure of the participating insurer; and
(B) administrative costs to administer and manage
the Program.
(5) Premium adjustments.--The Secretary shall adjust
premiums each quarter for each participating insurer to reflect
material changes in the exposure of the participating insurer.
(6) Premium increases.--Excluding any adjustment made under
paragraph (5), the Secretary may increase premiums for a
participating insurer not more than 7 percent annually.
(g) Loss Prevention Partnerships.--
(1) In general.--The Secretary, in coordination with the
advisory committee established under subsection (h), State
insurance agencies, and State and Federal emergency management
agencies, shall develop a list of activities that qualify as
loss prevention partnerships for purposes of this section,
which may include the following activities:
(A) Participating insurers identifying loss
prevention steps that make properties eligible for
coverage or renewal.
(B) Participating insurers making coverage
contingent upon the implementation of a loss prevention
activity by a potential insured party.
(2) Activities excluded from loss prevention
partnerships.--The Secretary, State insurance agencies, and
State and Federal emergency management agencies may not include
the following activities as loss prevention partnerships for
purposes of this section:
(A) The provision of an insurance premium discount
for an investment by an insured party or potential
insured party in an activity designed to reduce the
losses of the participating insurer, absent an
investment by the participating insurer.
(B) The provision of general information about loss
prevention.
(h) Advisory Committee.--
(1) In general.--The Secretary shall establish an advisory
committee to advise the Secretary with respect to the Program.
(2) Membership.--The committee established under paragraph
(1) shall include the following members:
(A) 5 members representing consumer organizations
engaged in fair housing, insurance, environmental,
climate, and technology advocacy.
(B) 3 members selected from individual primary
insurance companies selling property insurance
policies, including one large national insurer, 1
medium sized regional insurer, and 1 small insurer.
(C) 1 global reinsurer active in United States
property insurance markets.
(D) 1 domestic-focused reinsurer active in United
States property insurance markets.
(E) 2 insurance regulators from a State of the
United States, a territory or possession of the United
States, or the District of Colombia.
(F) 2 State legislators who--
(i) serve on State legislative committees
with oversight over insurance matters; and
(ii) are not employed directly or
indirectly by any person or organization
engaged in the business of insurance.
(G) 2 members selected from independent insurance
agents who serve traditionally underserved areas.
(H) 1 representative from a mortgage lender.
(I) 1 representative from a bank.
(J) 1 representative from each of the following
agencies:
(i) The Department of Housing and Urban
Development.
(ii) The Department of Health and Human
Services.
(iii) The Federal Housing Finance Agency.
(iv) The Department of Veterans Affairs.
(v) The Department of Agriculture.
(vi) The Federal Emergency Management
Agency.
(vii) The Office of Management and Budget.
(viii) The Environmental Protection Agency.
(K) 1 representative from the Financial Stability
Oversight Council.
(i) Federal Catastrophe Reinsurance Fund.--
(1) In general.--The Secretary shall establish the Federal
Catastrophe Reinsurance Fund to hold and invest premiums paid
by participating insurers.
(2) Issuance of notes and bonds.--
(A) In general.--If amounts in the Fund are
insufficient to pay obligations to participating
insurers, the Secretary shall issue notes and bonds
under this paragraph, the proceeds of which shall be
used for payment obligations to participating insurers.
(B) Terms.--Notes and bonds issued under this
paragraph shall be--
(i) in such form and denominations, and
shall be subject to such terms and conditions
of issue, conversion, redemption, maturation,
and payment as the Secretary may prescribe; and
(ii) fully and unconditionally guaranteed
both as to interest and principal by the United
States, and that guaranty shall be expressed on
the face of each bond.
(C) Interest.--Notes and bonds issued under this
paragraph shall bear interest at a rate not less than
the current average yield on outstanding market
obligations of the United States of comparable maturity
during the month preceding the issuance of the
obligation as determined by the Secretary.
(D) Treatment.--All notes and bonds issued under
this paragraph, and the interest on credits with
respect to those obligations, shall not be subject to
taxation by any State, county, municipality, or local
taxing authority.
(E) Satisfaction.--The Secretary shall utilize
investment revenue from the Fund to satisfy any notes
or bonds issued under this paragraph.
(j) Data Collection.--
(1) In general.--The Secretary shall--
(A) establish a statistical plan for quarterly
reporting by participating insurers of policy-level
claim transaction data;
(B) consult with the advisory committee established
under subsection (h) and the National Association of
Insurance Commissioners with respect to--
(i) the contents of the statistical plan;
and
(ii) the method of data collection;
(C) collect quarterly reports from each
participating insurer that include--
(i) a description of all exposures covered
by the Program at the time of the submission of
the report; and
(ii) a list of the type and amount of all
claims made in the previous quarter;
(D) in a manner that does not risk public
disclosure of personally identifiable information of
policyholders, provide the quarterly reports received
under subparagraph (C) to--
(i) the Director of the Office of Financial
Research to assess risk to--
(I) the financial stability of the
United States; and
(II) international financial
systems arising from United States
property insurance markets, including
lack of available property insurance or
inadequate coverage from property
insurance;
(ii) the Director of the Federal Insurance
Office to assess the risks to the financial
stability arising from under-insurance of
property insurance policies covering
catastrophe perils, including in traditionally
underserved insurance markets;
(iii) the head of the department of
insurance in each State; and
(iv) any other Federal, State, or local
government entity that, as determined by the
Secretary, is related to--
(I) catastrophe loss prevention,
mitigation, or recovery; or
(II) the promotion of competitive
property insurance markets; and
(E) make the data collected under this paragraph
available online in a manner that does not risk public
disclosure of personally identifiable information of
policyholders.
(2) Contracting with a statistical agent.--
(A) In general.--The Secretary shall contract with
a statistical agent via a competitive bidding process
to collect and review the data under this subsection
for accuracy and completeness.
(B) Office of financial research as the statistical
agent.--If the Secretary is unable to identify a
qualified statistical agent for collection of data
under this subsection, the Director of the Office of
Financial Research shall establish a data collection
infrastructure for collection of such data.
SEC. 4. REPORTS ON RELOCATION FUND AND EARTHQUAKE COVERAGE.
The Secretary shall--
(1) not later than 2 years after the date of enactment of
this Act, submit to Congress a report on the feasibility of
establishing a fund to relocate homes and businesses that have
become uninsurable due to catastrophe perils; and
(2) not later than 3 years after the date of enactment of
this Act, submit to Congress a report on the feasibility of
including earthquakes as a peril covered under the all-perils
property insurance policy.
SEC. 5. LONG-TERM POLICY PILOT PROGRAM.
(a) In General.--The Secretary shall, in consultation with States
and the National Association of Insurance Commissioners, establish a
pilot program for all-perils property insurance policies, as perils are
phased in under section 3(d), with a policy term of at least 5 years
(in this section referred to as a ``multi-year policy'').
(b) Premium and Policy Conditions.--An insurer who participates in
the pilot program established under this section may--
(1) increase premiums based on--
(A) price indexes of construction costs;
(B) changes in home value; and
(C) optional coverages selected by the
policyholder;
(2) not increase premiums based on a change in the
assessment by the insurer of the catastrophe peril risks
associated with the insured property;
(3) require property maintenance consistent with the
condition of the property at time of initial policy issuance;
and
(4) require loss mitigation investment partnerships as a
condition for the multi-year policy.
(c) Actions by the Policyholder.--
(1) Policy continuation.--With the agreement of the
insurer, a consumer purchasing the property during the term of
the multi-year policy may continue the policy for the remainder
of the term.
(2) Election to new insurer.--If the policyholder elects to
move to a new insurer during the term of the multi-year policy,
the new insurer may take into account loss mitigation
investment partnerships with the prior insurers in rate
setting.
(3) Cancellation by policyholder.--If the policyholder is
the recipient of any funds for loss prevention property
improvements from the insurer, Federal, State, local
government, or other source and the policyholder cancels the
policy before the end of the multi-year policy term, the
policyholder shall return a pro-rata share of such improvement
to the source of the funds.
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