119-hr4504

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4504 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 4504

 To require the Secretary of the Treasury to establish a catastrophic 
 property loss reinsurance program, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 July 17, 2025

 Ms. Kamlager-Dove (for herself, Ms. Matsui, Mr. Carbajal, and Ms. 
Wasserman Schultz) introduced the following bill; which was referred to 
 the Committee on Financial Services

_______________________________________________________________________

 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 5

    (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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